Rush Street abstains from DraftKings’ controversial iGaming surcharge plan

Article by : Charles Perrin Aug 6, 2024

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Rush Street has come out and revealed it has no intention of introducing an iGaming surcharge for its players.

Last week, DraftKings took the controversial step of launching a betting surcharge for players to address the issue of high tax rates in some states which will come into effect from January 1, 2025.

Currently, there are three states — New York, Pennsylvania, and Vermont — which have strict tax regimes in place — and the rates are 51%, 36%, and 20% respectively.

Meanwhile, Illinois passed a sliding tax rate scale in May, with a maximum of 40% passed on to the highest-earning operators, while the minimum set is 20%.

However, DraftKings’ decision has not gone down well, causing rancor in the betting community, with a phalanx of bettors and analysts voicing their disapproval on the social media platform X, formerly known as Twitter.

But Rush Street has stuck to its principles, insisting it would be doing a disservice to customers by rolling out the policy.

Rush Street’s CEO Richard Schwartz said: “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.”

DraftKings is adamant that the surcharge will be “fairly nominal”, but Rush Street doesn’t see it the same way, and it has become the first operator to eschew the gaming surcharge passed on.

Despite that, Rush Street enjoyed a brilliant Q2 after an earnings report was released.

The group’s revenue for that quarter hit $220.4 million, representing an increase of 35%, and it has set its sights on expanding its operations in Latin America to push into Brazil.

While the iGaming surcharge will have sparked serious debate, Rush Street is continuing to plot its own path which should be celebrated.