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00:00All right, so we know that FanDuel and DraftKings, especially DraftKings in particular, we know
00:08are upset with the tax rate in some of these different states, including New York, above
00:1250 percent.
00:13Some other places, 30 percent, 40 percent.
00:15But Sam, the interesting story, and I know that you guys wrote about this at Legal Sports
00:18Report, is it appears as though they're going to try and make that money up in some way.
00:25They tried once by, you know, DraftKings tried once by essentially saying that they were
00:29going to do something that they got locked back on.
00:32But do they really think, Sam, that they're going to get away with like raising their
00:36minus 110s to minus 130s with nobody noticing and things like, because there are other options
00:40for people to take to.
00:42And I also wonder if the competitors to DraftKings and FanDuel, if they choose to do this, just
00:47kind of stick it to them by saying, hey, look, same bets.
00:51You guys are charging minus 130, we're only minus 110.
00:54I don't understand how they think they're going to get away with this.
00:57Yeah, so the companies themselves have not outright came out and said anything about
01:02adjusting the prices.
01:03Now, they do have a lobbying group called the Sports Betting Alliance, which represents
01:06all the companies and has essentially threatened, hey, states, if you raise your tax rates
01:11like they did in Illinois when they were fighting the tax raise there, it's going to make
01:15prices worse for the customer.
01:16So essentially saying the companies are going to do this, companies themselves have not
01:19actually come out and said anything.
01:21Another group that has been very vocal on this issue is Wall Street's, you know, they
01:26have a lot of stake in the game.
01:28They want they don't want these companies to be losing 200 million dollars a year from
01:33just one state raising its taxes.
01:34So the firms have done a lot of research.
01:37One called Truist came out this week and said that if FanDuel and DraftKings raise their
01:43prices across the board, that's pretty interesting, not just in a single state, but
01:47across the nation.
01:48They could add about 240 million dollars in revenue, which sort of fits perfectly in that
01:54whole of revenue that they're projecting just from the Illinois tax increase next year.
01:59Pretty interesting that it's not a state by state measure.
02:02They've kind of threatened that in the past or at least talked about it.
02:05But it seems like it would be difficult just in the market, the way you market your odds
02:09to say, hey, in New York, it's minus 140, but in a state like New Jersey, it's plus
02:15110. It seems like that would be pretty difficult to do.
02:18They have never really gotten into why they might do it or why they might not do it.
02:23Now, overseas in Germany, a sort of similar thing has happened in the past where the
02:29country made a tax on a handle and operators dealt with it by passing the cost down to
02:34the customers there.
02:36The operator that now leads there actually got around it by just driving people towards
02:40more profitable bets.
02:42More profitable bets lately have been parlays and same game parlays, which these
02:46companies have repeatedly driven people to.
02:48So if I had to guess what they would do, I would just guess that they'll try to drive
02:53more people towards those more profitable bets and hold off on raising prices for now.
02:57But it is something that sort of is in the back that's being threatened and being
03:01thought about and pushed by at least some investors on Wall Street.