DraftKings CEO Jason Robins has bemoaned Illinois’ decision to enforce a new per-bet fee on operators, describing it as “incredibly ill-conceived”.
Earlier this month, lawmakers in the Prairie State approved a new measure that will see operators charged a fee on every bet placed within the state.
The new law, set to come into effect on 1 July, will enforce a $0.25 (£19p) charge for each operator on the first 20 million sports bets accepted in Illinois each year, before rising to $0.50 on all bets placed after that point.
In response, DraftKings joined FanDuel in announcing a $0.50 customer surcharge on all online and mobile bets in Illinois from 1 September to soften the blow of the new transaction fee.
The decision from the lawmakers is one that Robins believes will only drive players in the direction of the black market.
Speaking to CNBC, the DraftKings CEO explained: “The Illinois legislature, for the second time in two years, raised our taxes.
“This one was just incredibly ill-conceived. It was a per-wager tax of $0.50, which makes no sense if you’re betting $1, or even if you’re betting $5 or $10, we can’t make a profit anymore.
“The only way that we’re able to actually execute and take those bets in the state is to pass that tax on to the consumer. All it’s going to do is drive people to the illegal market or drive people to bet more. It just makes no sense.”
Robins was bemused by the surprise nature of the announcement, noting that he had met with legislators in the weeks prior and the topic was not raised.
The new transaction fee was a very late addition to Illinois’ state budget, with Governor JB Pritzker approving the $55bn fiscal blueprint for full-year 2026 earlier this week.
Pressed for comment on whether he feels the industry can truly be surprised by the development, Robins suggested there is a lack of education on the matter from those passing such legislation.
“I think it’s an education issue,” he noted. “I think some of the people making these decisions don’t understand that they’re not taxing our profit. They’re actually taxing our gross receipts.
“So effectively, in Illinois, it becomes a very large percentage of the revenue, which means that any investment in product or any other parts of the business have to get cut back.
“Obviously that’s something that I think we need to do a better job in educating but I think that’s largely part of the issue.
He continued, shedding light on how this transaction fee will harm customers in the long run, as he predicted the move will push players to offshore bookmakers.
He said: “Ultimately it’s the consumer that’s going to pay because whether it gets passed along in the direct form that is happening in Illinois, or whether it comes in the form of incentives cuts or budget cuts to fixed costs like product development, it’s going to hurt the customer and drive activity to an illegal market that pays no taxes, provides no consumer protections, is easy for minors to get on and bet on all sorts of things.
“We don’t want that, that was the exact purpose of legalising and regulating this industry in the first place.”
Robins concluded by stating that he believes most policy makers understand the drawbacks of a transaction fee and implied he had no fears other states could follow Illinois’ lead.
The decision to implement a transaction fee in Illinois comes less than a year after the state announced a new tax structure, with operators subjected to a progressive tax of 20% to 40%, based on annual revenues from 1 July 2024.
The scale replaced the previous flat 15% rate that was present in the state. DraftKings and FanDuel are the only two firms in the state to be caught in the top 40% bracket.
DraftKings had revealed plans to implement a gaming tax surcharge on customers based in states with GGR tax rates above 20% last year, but scrapped the idea two weeks later.
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Jason Robins takes aim at the state’s lawmakers and insists customers driven to the black market by new transaction fee decision will be the ones harmed in the long run
The post DraftKings CEO blasts Illinois’ new per-bet tax as “incredibly ill-conceived” first appeared on EGR Intel.