The company issued a statement on Tuesday evening, announcing a change in policy and citing customer feedback as the primary reason for the change.
DraftKings had previously revealed plans to introduce a surcharge to offset gambling tax-related costs in some states. The fee was originally scheduled to start being collected at the beginning of 2025, but the company faced potential challenges as its main competitor, FanDuel, publicly stated during an earnings call that it would not adopt a similar surcharge. This development reportedly prompted DraftKings to reconsider its approach.
In an official statement, DraftKings said, "We always listen to our customers, and after considering their feedback, we have decided not to implement the gambling tax surcharge. We remain committed to providing the best value in the industry to our loyal customers."
The decision to cancel the surcharge could help DraftKings avoid potential strong opposition from customers, who might consider switching to competing sports betting companies that do not charge additional fees.
In July 2024, the company was fined $100,000 by the New Jersey Division of Gaming Enforcement for inaccurate financial reporting, which required state regulators to correct several months of sports betting data. These errors included overstating betting amounts and underestimating other types of bets, leading to incorrect tax filings by DraftKings at its New Jersey partner, Resorts Digital.
Despite these setbacks, DraftKings reported a 53% increase in revenue year over year for the first quarter of 2024, reaching $1.18 billion. However, the company also recorded an operating loss of $138.8 million for the quarter, a reduction from the previous year's loss of $389.8 million, but still indicating ongoing financial challenges.
