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BetRivers has no plans to add surcharge in highly taxed states
The sportsbook announced that it will stand pat after DraftKings declared its intention to add fees to winning bets in four states.
Last week, DraftKings Sportsbook made headlines in the sports betting industry when it announced a new plan to add a fee onto bettors’ winning bets in four states.
New York, Illinois, Pennsylvania and Vermont all charge sportsbook operators a tax rate of more than 20%. Operators have long complained that these tax rates make doing business in those respective states extremely challenging. With other states considering raising their own taxes, it felt like DraftKings was putting its foot down.
When DraftKings announced its new plan, the reaction on social media was predictably negative. It was a bold move by DraftKings to come out and announce these plans in such a matter-of-fact way. Many wondered why the sportsbook didn’t try a more sly tactic, such as raising its hold in futures markets or slightly altering its betting lines.
Most onlookers were also anxious to see how other sportsbook operators would respond to the DraftKings announcement. Would they use this as an opportunity to enact a similar plan? Or would they use this as a marketing opportunity to differentiate their brand?
BetRivers won’t be adding fee
BetRivers was the first sportsbook to publicly react to the DraftKings plan, and used it as an opportunity to take a jab at its competitor.
“As we put our customers first, it was an easy decision for us,” said Rush Street CEO Richard Schwartz. Rush Street is the parent company of BetRivers Sportsbook.
Obviously, the comparison is not apples-to-apples.
Under Illinois’ new sliding tax rate system, BetRivers will pay between a 25-30% tax rate for the majority of the year, while DraftKings will pay 40% of its gross revenue to the state for almost the entire year.
A quick look at NFL betting lines on BetRivers’ app in New York shows that the operator is dealing -112 juice on spread lines. DraftKings is offering the industry-standard traditional -110 lines on its NFL spreads. To simplify the point: A bettor using BetRivers in New York would need to risk $112 to potentially win $100 on an NFL spread bet, while a bettor at DraftKings would only need to risk $110.
Of course, the two operators are at other ends of the spectrum.
In New York last week, DraftKings accepted $97 million worth of sports betting handle and generated $11.4 million in gross revenue. Both numbers were second in the state behind FanDuel.
On the other hand, BetRivers had a betting handle of just $6.7 million, with a gross gaming revenue of $763,000. Those numbers were both sixth in the state, with a wide distance separating BetRivers and Fanatics Sportsbook, which finished fifth.
