DraftKings has ‘no excuse’ to consider surcharge ‘cash grab’
Less than an hour after Flutter’s second-quarter earnings call ended Tuesday, DraftKings announced that after hearing customer feedback, it will back off plans to impose a winners surcharge. The company announced the idea in early August, only to get swift and negative feedback.
Wall Street Wednesday reacted positively. DraftKings’ shares were up as high as $33.50 per share before they settled at $32.06, up nearly 2 percent. While Rush Street Interactive and Penn Entertainment previously said they would not follow DraftKings’ lead, the company was clearly waiting to see how FanDuel would react.
“We have no plans to introduce a surcharge to winners,” CEO Peter Jackson said during the Q&A portion of the call. He then declined to entertain the issue further when others asked.
Jefferies’ David Katz wrote in a note that “Over time, our view had evolved to consider the notion that the initiative was intended to spark debate and awareness rather than actually recoup margins.” Truist has previously addressed “ tinkering with OSB pricing” and that analysts there “believe DKNG has less room to do so than FanDuel.”
But those in the industry were less forgiving. An argument can be made that DraftKings was the leader in accepting or proposing high tax rates. It offered to pay the state of New Hampshire 51% of revenue for the right to have a monopoly in 2019.
“When mobile sports betting was first legalised in New York, it was DraftKings – alongside FanDuel – who led the way in championing the legislation that included a 51% tax on winning bets,” Fantasy Advocates for New York Sports wrote in a statement Wednesday. “They simply had no excuse to then use these tax rates as a way to justify what could have been a $32 million cash grab for their players’ pockets.”
What a boo-boo: DraftKings’ errant email worries bettors
On the same day it announced it would back off of its proposed winners’ tax, DraftKings mistakenly sent out an email that caused consumers to worry their accounts had been hacked, reports Sports Handle.
The email was sent under the Jackpocket logo and explained the “dead heat” rule in golf. Bettors were offered a one-time promotion due to the dead-heat reduction. But only those who had a bet affected by the reduction will get the bonus.
DraftKings followed up the email with a social media post explaining the error, and an apology email. DraftKings representatives told Sports Handle that the issue was email-related, not security-related.
Sports betting headed to Missouri ballot
Missouri’s Secretary of State Tuesday announced that it approved a retail and digital sports betting measure for the November ballot. The initiative is backed by the state’s professional sports teams, and operators DraftKings and FanDuel, but not its casinos.
The proposal would require digital wagering platforms to be tethered to professional sports venues. Casinos companies and pro sports venues a single betting skin. Attempts at legalisation through the state legislature would have allotted casinos companies one skin per location, up to three.
Missouri’s ballot will also have a highly charged abortion issue on it. An initiative that would allow for abortion up to the point at which a fetus is viable outside the womb was also approved. That initiative question is expected to drive higher than usual voter turnout.
Fanatics goes live in Louisiana
Fanatics Sportsbook added its 22nd state Thursday (15 August) when it went live in Louisiana. It is partnered with the Boomtown Casino & Hotel in suburban New Orleans. Fanatics Betting and Gaming launched in 2021, and is now available to 95% of the “addressable market”, according to a company press release. Consumers can earn FanCash to be redeemed bonus bets, team merchandise, and more.
Among the other platforms available in Louisiana are bet365, BetMGM, BetRivers, Caesars Sportsbook, DraftKings, ESPN Bet and FanDuel.
Ontario premier wants poker pools across country lines
Ontario Premier Doug Ford supports the idea of opening up online gambling to cross country lines. The idea would allow Canadians to play in poker pools and fantasy contests against players around the world, the CBC reported Monday (12 August).
Ford’s government wants the following question answered:
- “Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada?”
- “Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada?” Proponents of the idea argue that there could be tens of millions of dollars at stake. They say that Ontarians are already playing on unregulated international platforms. That means that tax dollars that could be flowing into the province are going elsewhere, and that consumers aren’t protected.
Big gambling media move in Canada
The Lazarus Agency Limited tweeted Tuesday (13 August) that it has entered into a letter of intent to buy Parleh Media Group for $5m. Parleh includes media brands Gaming News Canada, Homestand Sports and The Parleh.
Arkansas casino proposes unique way to fund NIL deals
Saracen Casino in Pine Bluff, Ark. is seeking to legalize 50/50 online raffles in hopes of raising funds for name, image and likeness (NIL) deals for athletes at the University of Arkansas.
According to the Arkansas Democrat Gazette, the state’s Department of Finance and Administration said that “the proposed NIL raffle is not authorized under existing Arkansas law and could not be implemented with just a rule change”. There is also “a statutory ban on online raffles that can be found at Arkansas Code Section 23-114-401”.
Carlton Saffa, Chief Market Officer for Saracen, has estimated that the new games could raise an additional $24 million in state taxes in the first year. Executives at Oaklawn, another casino in the state, said they don’t support legal online casino, but support raising money for the “athletic fund at the U of A”.
Detroit casinos report negative wagering revenue
Detroit’s three commercial casinos reported -$399,229 in sports betting revenue for July, according to the Michigan Gaming Control Board. The overall had positive aggregate revenue of $105.9m, including $106.3m from table games and slot machines.
MGM grabbed 48% of market share, followed by MotorCity (29%) and Hollywood Casino at Greektown (23%).
Worth the read
Eric Raskin at Casino Reports says DraftKings’ proposal to tax winners in high-tax sports betting states wasn’t the worst idea ever, but it was close. Remember the “integrity fee”?
In other news …
VSiN will bring viewers behind the scenes of a big-time football survivor pool with “Circa Survivor: The Quest for $9.2 Million”, which debuts Monday (19 August) at 9pm ET, the company announced. The docuseries will be available via VSiN’s YouTubeTV channel, VSiN.com and live on X (formerly Twitter) @VSiNLive.
A week after its grand opening, War Horse Omaha temporarily closed Thursday (15 August) due to issues with the air conditioning. The casino did not indicate when it would reopen.
ESPN hired former Yahoo! Sports wagering analyst Pamela Moldando, it shared in a press release Wednesday. Details of the contract were not announced. “Maldonado will be a key addition to ESPN’s sports betting coverage this college football season, leveraging advanced analytics and a deep understanding of the game to provide sharp, insightful commentary for fans looking to place bets,” according to the release.
Bally’s Corp. opened a VIP lounge 12 August at its temporary Chicago casino at Medinah Temple. The space is located on the third floor of the casino near the table games area, and features seating for up to 30 people. A VIP Player Services window also opened.
Mississppi’s Gold Strike casino announced Wednesday (14 August) a new wagering partnership with DraftKings. The company will put 10 sports betting kiosks in the sportsbook, which also has four teller windows.
ICYMI on iGB
Notre Dame suspends men’s swim team for betting violations
Flutter beats expectations, raises guidance, and says ‘no’ to winners’ surcharge
Politics of DraftKings’ proposed winners’ tax
Washington, DC attorney general probing Intralot sports betting contract
Original article: https://igamingbusiness.com/sports-betting/draftkings-missouri-ontrario-state-of-the-union/
