Fanatics Sportsbook is the full dissident to mount a challenge against the rest of the sports betting operators in the state of Illinois, which is now going to undergo a change in tax structure for sportsbooks.
Betting Surcharge Kept to a Minimum, Bettors Not Happy Either Way
Because the state will be charging higher tax rates from the 20-millionth bet onwards, operators have responded by passing the tax onto the consumer. Both FanDuel and DraftKings introduced a 50-cent betting surcharge on every wager, which is meant to alleviate the pain of the new tax.
The operators said that anything lower than that was simply not feasible. Fanatics Sportsbook, though, begs to differ, assaulting the statement head-on and seeking to lower the rate to 25 cents instead.
Although it’s a newcomer to the market (Fanatics Sportsbook only launched in April 2024, i.e., a little over a year ago), the company knows that differentiation is the steadier way forward in a field heavily dominated by what is the virtual duopoly between DraftKings and FanDuel.
Whether this would prove an efficient strategy remains to be seen. Fanatics has deep pockets, which could help it outlast almost any challenge, but even then, those funds are not endless.
The question now is how Fanatics Sportsbook can support a betting surcharge of just 25 cents when DraftKings and FanDuel have sworn by the 50 cents they wish to charge every bet placed by a punter on their platforms.
Is It Possible to Not Introduce a Surcharge?
Fanatics’ surcharge, however, is not likely to elicit praise from punters who would register the end effect – that suddenly they are spending more money to bet on the same things and not because they are assuming more risk, but rather, because the operators are billing them more.
Fanatics is likely to also be criticized by customers, and not least, those who are not really following the regulatory landscape but would rather grumble against the service provider. What about the rest? BetMGM, Bet365, and Caesars may hold their ground in an attempt to capture disillusioned gamblers and boost their results in another way.
How much the actual new tax law would hurt gambling operators remains to be seen, however, but the surcharge will hurt consumers.