might know more on 8/13 when DK's parent company releases their earnings. The article at PlayPA suggests DK refuses to pay any state more than 20% tax on their revenue that that customers in >20% states are on the hook for the difference.
from the article:
DraftKings will pay taxes up to 20% and the winning bettor is on the hook for the rest
The way the tax will work is DraftKings will pay the gambling tax up to 20% and the winning bettor will pay the taxes above that rate in states with a tax rate greater than 20%. In Pennsylvania, sports betting is taxed at 36%. That means winning sports bettors will be on the hook for a surcharge of 16% if they bet with DraftKings.
“We definitely thought through a lot of different ways of doing it,” Robbins said. “And… some better idea comes along and we’re open to it. I think the important thing is that if you look at the way it’s typically done in other industries — whether it be hotel taxes or even the sales tax that you pay when you buy something at the store, taxes you know you name it — it’s typically line-itemed out separately, and usually 100% passed along to the consumer.
“In this case, we’re obviously subsidizing a chunk of it. We just thought that was most in line with how it’s typically done versus trying to obfuscate it, which isn’t consistent with our commitment to be transparent to our customers and be very customer-friendly.
“I know there’s maybe benefit to hiding it because maybe people don’t notice, but I think over the long term, customers appreciate transparency and even if they don’t love that their state implemented a high tax and some of that is being passed along, I think they prefer that to not knowing if it was buried in the pricing or something else.”
For now, it’s full steam ahead on the DK tax
Robins said he doesn’t see a reason DraftKings won’t go ahead with the plan, but DK will listen to customer feedback prior to launching the surcharge in January.
