We all know that there will be a ridiculously high tax on New York mobile betting. And now, the CEO of DraftKings, Jason Robins, has made an interesting statement on the issue. It is being reported that Robins believes the 51% tax rate will not be a problem for the company. While speaking at the Canaccord Genuity 2021 Digital Gaming Summit, he plainly said that players who bet for profit are “not the kind of players” DraftKings wants.
Now, let’s think about that statement for a moment. What Robins seems to be saying is that the exorbitant tax rate set by the state will not a problem because DraftKings does not want players who will bet to win. But doesn’t every player making a bet hope to win? Or are there actually some players out there who want to lose? That sounds pretty ridiculous.
Now, we understand that what Mr. Robins actually means is probably that DraftKings wants recreational players and not professional gamblers. However, that does not diminish the glaringly obvious undertones of his statement. That is: The only way DraftKings will be profitable in New York is to cater to and deal with novice players who consistently lose money.
So now, New York mobile betting seems like it will have to be an entertainment driven market focused on casual players. But how exactly will DraftKings and others accomplish that? Will the odds be so horrendous that no serious gamblers will participate? Will accounts be locked if a player wins too frequently? Will certain players be banned because they are deemed to be “professionals”? This could become a real sticky mess.
So, as the launch of New York mobile betting approaches, we will have to see how DraftKings and others market themselves, and what player incentives they offer (or don’t offer). One thing is certain, however: New York State has put something in motion that may end up failing due to the tax rate they put in place. But at least the leadership at DraftKings was honest enough to be transparent about what they will have to do to be successful.
