Will FanDuel Implement a Winning Tax Like DraftKings?
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00:00I guess the question is with FanDuel's earning report coming this afternoon, do you think
00:07that they will follow suit like DraftKings and also make the same announcement that they're
00:11going to tack on a little tax to some winnings?
00:14Yeah, Craig, if I had to predict what FanDuel is going to do here, I would lean towards
00:19them not doing a surcharge tax like DraftKings has announced in those states like Pennsylvania,
00:24New York, Illinois and Vermont, where the taxes are above 20%.
00:29So essentially, they're passing that down to the better, like you said, the small charge,
00:33but still something that people are going to notice.
00:35It's essentially going to make the pricing worse after the fact that you place a bet.
00:40I would guess that FanDuel wouldn't do that.
00:43It seems like it'd be a good kind of PR move to just not follow suit.
00:47It was relatively unexpected when DraftKings announced this.
00:50So it gives you the idea that a lot of companies weren't thinking about it in the first place.
00:55Now, Flutter, the company that owns FanDuel, has a lot of experience across the world,
00:59unlike DraftKings does.
01:00So some Wall Street analysts have hypothesized that perhaps they've tried this elsewhere
01:05or contemplated doing it in other markets.
01:08They essentially have more data because Europe and Asia have had sports betting legally for
01:13a lot longer than the U.S.
01:14So they could draw on that, see if maybe it's worked there.
01:18A lot of people are also waiting to see if they do it, then is this going to mean that
01:23every other company then follows suit?
01:25DraftKings and FanDuel are the two biggest players in the space.
01:28So essentially, if they're able to stay at the top of the market and add these fees,
01:33you might think other books, maybe, why wouldn't we do this?
01:36A lot of people are split on how it's going to impact a company like DraftKings, whether
01:41or not it's going to cause those small bettors, like you said, to go elsewhere to a platform
01:45that doesn't have it, or if it's going to actually make up so much money and people
01:50really won't notice.
01:52I think we've seen a lot with the popularity of parlays and same game parlays and how the
01:57pricing has gotten a little bit worse when you combine some of these player props together
02:03that maybe people really don't care about pricing as much as you would think.
02:07They just want a better user experience.
02:09They want a platform that they're used to.
02:12That's what DraftKings is betting on here.
02:13We'll see if FanDuel copies them.