The decision by DraftKings to start implementing a surcharge on winning wagers in high-tax markets has created a ton of controversy. However, during the DraftKings earnings call, CEO Jason Robins was convinced they might be the first company to do this but that they would not be the last.
“I think every company has to do what’s best for their own business. I think we believe this is what’s best for us. And I would imagine that, you know, if that’s our calculus, then others would come to the same conclusion,” he noted.
However, one competitor has already come out and made it clear that a surcharge is not an option for them.
Rush Street CEO says they put ‘customers first’
“As we put our customers first, it was an easy decision for us,” said Rush Street Interactive CEO Richard Schwartz.
“RSI remains committed to maintaining its leadership position in the industry by continuously prioritizing the needs and preferences of its players. We believe that RSI’s focus on customer satisfaction, coupled with its innovative rewards and loyalty programs, sets a benchmark for excellence in the online gaming industry,” he added.
Rush Street’s BetRivers brand is operational in all of the markets DraftKings is implementing the surcharge, save for Vermont. However, the company issued a press release on Monday clarifying its stance and seemingly taking a swipe at its competitor.
The relatively brief release did not elaborate on whether or not Rush Street would take any other steps to potentially mitigate the hefty tax rates of markets like New York, Pennsylvania and Illinois.
BetRivers is a mid-tier operator that usually ranks sixth out of the eight sports betting operators in New York. It holds a similar size of the market in Pennsylvania but fares slightly better in Illinois.
Rush Street opts to cut affiliate spending in some markets
However, during the earnings call for Rush Street last week, Schwartz did confirm the company was curbing marketing spend, particularly when it came to affiliates. He noted the decision hinged largely on the company focusing on markets where they can maximize its ROI.
Earlier this year, Rush Street was a major subject of sale rumors, including a Bloomberg report that none other than DraftKings might acquire the business.
