DraftKings Reverses Course, Drops Controversial 2025 Betting Surcharge

It has not been a good week for DraftKings Sportsbook.

The industry giant made waves last week when it announced it would enact a surcharge on all customer winnings in four markets. On Wednesday, DraftKings announced that it would no longer be moving forward with the decision, representing a significant victory for bettors in the affected markets.

“We always listen to our customers, and after hearing their feedback, we have decided not to move forward with the gaming tax surcharge. We are always committed to delivering the best value in the industry to our loyal customers,” a DraftKings spokesperson said of the decision.

The move comes after other operators, including FanDuel, did not follow suit with their own surcharges. DraftKings had hoped the charge would help offset increasing tax rates on operators, leading to the rest of the industry following suit. Instead, it now needs to apologize and reverse course for the idea. 

The most extensive damage to DraftKings came when FanDuel owner Flutter opposed the idea of a surcharge. Soon after that, DraftKings' stock price dropped significantly, leading to a nine-month low. By comparison, Flutter saw its stock price rise by almost 10%.

Is DraftKings in Trouble?

DraftKings Sportsbook comes away from this debacle looking bad in the eyes of bettors. With so much money being made in the sports betting industry, customers responded with outrage after the surcharge was announced. The move was seen as greedy, a word that has been thrown around in conversations about DraftKings over the last couple of years.

DraftKings’ user base is too large for it to be in danger of shutting down, but the fallout from this will hurt. The proposed surcharge and the response from several of the operator’s competitors captured a lot of headlines. Even with DraftKings reversing their decision, the damage has been done in bettors' minds.

Don’t be surprised if DraftKings sees a significant drop in activity over the coming weeks. Bettors in the four markets where the surcharge was going to be added have already begun looking for alternatives, and they may not be willing to return. 

DraftKings will remain the second-most popular sportsbook in the US, but the fallout will widen the gap between it and industry-leading FanDuel.