{"id":202039,"date":"2022-02-18T19:40:28","date_gmt":"2022-02-19T03:40:28","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=202039"},"modified":"2022-02-19T18:18:28","modified_gmt":"2022-02-20T02:18:28","slug":"draftkings-ceo-talks-new-york-sports-betting-tax-lawmaker-says-it-could-be-cut","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-ceo-talks-new-york-sports-betting-tax-lawmaker-says-it-could-be-cut\/","title":{"rendered":"DraftKings CEO Jason Robins Talks New York Sports Betting Tax, Lawmaker Says It Could Be Cut"},"content":{"rendered":"

DraftKings cofounder and CEO Jason Robins said the gaming operator and tech company is taking \u201ca wait-and-see\u201d approach on reports that New York state may consider changing the tax rate on mobile sports betting revenue.<\/p>\n

\"Jason<\/a>
DraftKings CEO Jason Robins told stock analysts Friday New York could “be a very profitable market” for the sports betting company. However, that’s contingent on the state offering “an appropriate tax rate,” he said. Without that, Robins added it would take some adjusting to become profitable within three years. (Image: CNBC)<\/figcaption><\/figure>\n

The comments came during the company\u2019s Friday morning conference call with stock analysts to go over financial figures from the fourth quarter of 2021. Mobile wagering in New York didn\u2019t go live until January. However, its position as the alpha-state for US sports betting means it will have large implications on the financial health of companies that offer sports betting there.<\/p>\n

Many have wondered how a 51 percent tax on gross gaming revenue would impact licensees\u2019 profitability.<\/p>\n

Robins told analysts that New York has been a boon to the company. With a population of close to 20 million, it\u2019s by far the largest state to offer statewide mobile sports wagering. (Florida is slightly larger. But operations for the Hard Rock Sportsbook mobile app have been suspended there pending an appeal of a federal lawsuit.)<\/p>\n

As such, the CEO pointed out that DraftKings needed less than a day to get 100,000 first-time bettors. It took 17 days to reach that mark in Arizona and 170 days in New Jersey. He also noted that some companies took aggressive action to lure bettors. However, Robins said DraftKings avoided that, as it seeks to be profitable in the state within three years.<\/p>\n

The New York customer acquisition has been so efficient, and the early player cohort results have been so strong that we\u2019re hopeful that, with an appropriate tax rate, it can be a very profitable market for us,\u201d<\/strong> Robins said. \u201cBut if not, we\u2019ll make the necessary adjustments to ensure that it meets the 2- to 3-year payback and that it is a very profitable market for us in the long run.\u201d<\/strong><\/p><\/blockquote>\n

Wall Street reacted negatively<\/a> to the DraftKings report, with analysts and traders still worried about the long road to profitability ahead of the Boston-based company. DraftKings ended trading with shares at $17.29, a drop of more than 21% from Thursday.<\/p>\n

Earlier in the day, the stock hit a 52-week low of $17.23. Its high of $74.38 came in late March, and the stock has gradually gone downhill since last September.<\/p>\n

Pretlow Willing to Cut Tax Rate, With a Catch<\/h2>\n

Robins told analysts \u201cThere\u2019s been some chatter\u201d in Albany about possibly adjusting the tax rate.<\/p>\n

That chatter mainly comes from a bill that Assemblyman J. Gary Pretlow, D-Mount Vernon, filed last month.<\/p>\n

A8658<\/a> would prohibit the sports betting licensees from seeking a change in the tax rate. However, in an interview last week with PoliticsNY<\/em><\/a>, the chair of the Assembly Racing and Wagering Committee said there\u2019s more to the bill, as he\u2019s not a fan of the tax rate.<\/p>\n

It\u2019s actually a different directive, by me, to get more players into the market, which would then lower the tax rate,\u201d<\/strong> Pretlow said. \u201cI\u2019ve always thought that 51 percent was too high.<\/strong> The state shouldn\u2019t make more money than the operators, but under this way, they do.\u201d<\/p><\/blockquote>\n

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