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BetRivers Won't Institute Tax Surcharge on Winning Bets, Opposing DraftKings' Decision

Gary Pearson

Last Updated: August 6, 2024 12:54 PM EDT • 1 min 58 sec read.

NASCAR Xfinity Series driver Ryan Truex celebrates in victory lane after winning the BetRivers 200 at Dover Motor Speedway as we look at BetRivers' decision not to implement a surcharge on winning bets.
NASCAR Xfinity Series driver Ryan Truex celebrates in victory lane after winning the BetRivers 200 at Dover Motor Speedway. Photo by Matthew O'Haren via USA TODAY Sports

One of the best sports betting sites won't follow DraftKings' lead by implementing a tax surcharge on winning bets in high-tax states.

Rush Street Interactive, the parent company of BetRivers, announced it won't tax winning bets, opposing the decision made by DraftKings last week. BetRivers announced its decision on Aug. 5.

On Aug. 1, DraftKings announced that customers in the New York sports betting scene, Pennsylvania sports betting scene, Illinois sports betting scene, and Vermont sports betting scene will have to pay a surcharge of 3% to 5% on each winning bet from Jan. 1, 2025.  

Though the unprecedented decision incited swift and widespread condemnation from bettors in those states, DraftKings is steadfast, saying the surcharge would more than offset any lost revenue from bettors who cut ties with the sports betting juggernaut. 

BetRivers' decision to hold firm and oppose DraftKings' move to implement the surcharge is due to its "dedication to providing exceptional value to its players," said Rush Street CEO Richard Schwartz. "As we put our customers first, it was an easy decision for us.”

High tax rates the root cause of DraftKings' decision 

Disproportionately high tax rates in the New York, Pennsylvania, Illinois, and the Vermont markets triggered DraftKings' decision. 

New York's 51% tax rate on gross gaming revenue is the highest, while Pennsylvania's 36% rate is a not-so-close second. Vermont charges 31%, while Illinois' tax scheme is altogether different, with lawmakers recently deciding to amend the 15% flat rate, implementing a 20% to 40% scale depending on overall revenue. 

That graduated scale more severely impacts the highest revenue sportsbooks, including DraftKings, FanDuel, Caesars, and BetMGM. 

The four aforementioned high-tax states are the only ones with a rate exceeding 20%. 

DraftKings said it has no intention of implementing the surcharge for those using a DraftKings promo code outside of the four high-tax states. 

What about other prominent online sportsbooks? 

BetRivers' landmark decision may cause a splintering of policy as we await which side of the fence our other best sports betting apps will land on. 

FanDuel's pending decision, as the United States' No. 1 online sportsbook and casino according to market share, is at the top of many sports bettors' minds. Flutter Entertainment, FanDuel's parent company, could make a decision as early as Aug. 13. 

If it follows DraftKings' lead, two-thirds of the betting handle in some of the highest-grossing markets would be forced to pay a fee on every winning bet. 

BetMGM and Caesars haven't publicly stated their opinion on the matter, while ESPN BET's parent company, Penn National, will release its earnings on Aug. 8. ESPN BET is a general newbie to the online sports betting scene, so it's unlikely it will implement the controversial surcharge. 

Interestingly, BetRivers' slightly more juiced-up betting lines could go a long way to offset the revenue it would miss out on by not introducing the winning bet surcharge. 

Those who use a BetRivers bonus code know it offers -112 lines on many spread bets in New York compared to DraftKings' -110, which would be tantamount to an approximate 2% unofficial surcharge on all winning bets. 

However, those juiced-up lines apply only to New York and still fall below the 3% to 5% blanket surcharge expected from DraftKings.

Written By:
Gary Pearson
Gary Pearson has written professionally since 2010, focusing on sports betting since 2014. Before entering the sports betting space, he contributed to the Canadian Press, FanSided, the Hockey Writers, the Calgary Herald, and other publications. His work has also been featured in Sports Illustrated and Bleacher Report. Gary, who consumes sports like a blue whale devours plankton, has a penchant for writing predictions and analyses across several sports, including hockey, soccer, football, tennis, and more. He bets regularly, preferring single-game picks, props, and live betting. While there isn't a sport he has yet to dabble in, Gary prefers betting on soccer, hockey, and football. He studied at various post-secondary institutions, including the University of Calgary, SAIT Polytechnic, and Griffith University, located in Brisbane, Australia. Gary has a marketing degree and completed his bachelor's degree in journalism at Griffith University. He feels strongly that life experience is as essential as post-secondary education, helping formulate more accurate predictions and analyses. Gary believes that competing at a high level of amateur sports during his formative years helped him better understand an athlete's psyche and the nuances and complexities of a team's dynamic, both on and off the playing surface. He feels that knowledge is immeasurably important when offering his analytical expertise. He has lived on five continents and currently resides in Canada.