(The Center Square) – In the wake of tax hikes on sports betting apps in Illinois, one operator that announced surcharges to make up revenue is changing course.
DraftKings announced last month it would add surcharges to high-tax states like Illinois, which just hiked taxes on sports books from 15% to as much as 40%. Now the company says for the time being, no surcharges will be imposed.
“We always listen to our customers and after hearing their feedback we have decided not to move forward with the gaming tax surcharge. We are always committed to delivering the best value in the industry to our loyal customers,” the company said in a statement.
DraftKings was the first operator to announce a surcharge on users, and it was expected other sports books would do the same in Illinois, but none have followed suit.
Illinois is one of the biggest sports betting markets in the country. Illinois and three other states were singled out in the initial announcement by DraftKings.
PlayIllinois.com managing editor Tyler Andrews said the surcharge announcement was a public relations nightmare for DraftKings.
“It didn’t go well, but at least they were up front about it,” said Andrews. “Once they took a couple weeks and saw all the negative feedback on social media, they said we are going to listen to our customers and not go for it.”
FanDuel announced it would skip the surcharge, instead offsetting the impact of high tax states with more locally tailored marketing and promotions.
Andrews believes this is probably not the end of the surcharge talk.
“I wouldn’t say that bettors have won at this point, but what I would say is when you impose these really high tax burdens on operators, it is going to come back to the customers eventually,” said Andrews.