Investors around the country are waiting to see if FanDuel will implement a surcharge similar to DraftKings

On Monday, BetRivers announced they will not implement a surcharge on winning bets. They are the first sportsbook to make a public statement saying they would not follow in the footsteps of DraftKings. Rush Street Interactive CEO Richard Schwartz says his company puts their customers first and adding a surcharge tax would not benefit gamblers. Schwartz called it an “easy decision” for RSI. While BetRivers was quick to say they’re not adding a surcharge, other sportsbooks have not done the same.

That’s true for DraftKings; the biggest rival in the United States, FanDuel. Flutter is the owner of FanDuel and they have an earnings call next week. They’re expected to discuss whether a surcharge will be added to states with a high gaming tax. Flutter’s earnings call is set to happen on 8/13. Certain investors believe it will be a no-brainer for FanDuel to add this surcharge in specific states.

Investors believe FanDuel can thrive in the market without adding a tax

Barry Jonas is with Truist Bank and noted that FanDuel could still thrive in the market without adding a surcharge. Jonas mentioned Illinois in his example. He said that FanDuel could adjust pricing in the state to offset higher taxes. Additionally, Jones said two weeks is not enough time for FanDuel to prepare a surcharge. This would have to be something they had been working on for quite some time. Regulus Partners is an analyst firm in the UK and they had this to say to DraftKings about the surcharge they’re set to add.

“The fact that there is no structural reason for a critical mass of competitors to copy DraftKings means that they won’t, leaving DrafKings exposed as palpably offering worse value to customers with winning bets,” they said, going on to describe the fee as “economically illiterate.” – Regulus Partners

DraftKings could potentially lose a ton of market share if they’re the only sportsbook to add a surcharge fee in a state with high tax rates. Several analysts agree that the effectiveness of the tax is tied to competitors in the market adding one themselves. The company could lose massive amounts of customers who would leave for a sportsbook without a surcharge. Their surcharge is set to go into effect on January 1, 2025.