DraftKings’ plan to levy a surcharge on winning bets in states with high sports betting tax rates was one of the main topics of conversation at Bet Bash, a sports betting networking conference held at Circa this week.

DraftKings CEO Jason Robins announced on August 1 that the sports betting giant, which does not operate in Nevada, will begin deducting a 3.2 percent gambling surcharge from winning bets in Illinois next year, where the tax on sports betting was recently increased from 15 percent to 40 percent.

This means that a player placing $11 to win $10 on a traditional single bet would only make $9.68 using this plan, which was panned by both pro bettors and bookmakers at Bet Bash.

“If any living person bets somewhere where DraftKings takes 3.2 percent of winnings, they’re crazy,” longtime professional bettor Alan “Boston” Dvorkis said during a seminar. “Don’t do it. You won’t win. I don’t care how good you are. There’s not a living person who can overcome that.”

At odds of -110, bettors would need to win 52.4 percent of their stakes to make a profit. With the new markup, which is -114, players would need to win 53.3 percent of their stakes to make a profit.

Back at sea

“What they’re doing now, in terms of the fees they’re charging people, they’re just going to drive people back to offshore sports betting,” said Billy Walters, considered the most successful sports gambler of all time. “That’s all they’re going to do. The offshore world is going to be bigger than it’s ever been.”

DraftKings plans to introduce surcharges in states with a tax rate above 20 percent. These currently include Illinois, Pennsylvania, Vermont and New York, where the tax rate is 51 percent. The tax rate in Nevada is 6.75 percent.

High tax rates in other states, proposed additional fees and other practices by sportsbook operators, such as limiting bettors’ odds of winning, have longtime Las Vegas bookmakers and bettors worried about the future of the industry six years after the Supreme Court overturned the federal ban on sports betting.

“Everyone kind of lost out on this deal,” Walters said. “The politicians supposedly did this for the people. They wanted to give them a legal, legitimate place to bet, where there are no criminal elements and where taxes and jobs can be created, but people are still treated fairly.”

“They have allowed a monopoly to emerge. And when there is a monopoly, the only person who wins is the one who has the monopoly.”

According to consulting firm Eilers & Krejcik Gaming, FanDuel and DraftKings together have a 67 percent market share in the U.S. sports betting market.

“The Nevada Way”

South Point Sportsbook Director Chris Andrews and Gaughan Gaming Sportsbook Director Vinny Magliulo spoke in separate seminars about how Nevada’s traditional bookmaker model compares to the rest of the country.

“The relationship between bettors and bookmakers should be one of mutual respect. It should not be one of hostility,” Magliulo said. “And if a bettor is successful, you take your hat off and pay him money. If customers don’t win sometimes, you’re not going to have any business.”

“Don’t feel sorry for the bookie. Nobody listens when the bookie cries, not even the bookie’s grandmother, because she could be on the other side anyway.”

After sports betting was legalized across the country, Andrews took exception to claims by some foreign operators that Nevada’s bookmaking model was outdated and that the average win rate of Nevada bookmakers, which has averaged 5.77 percent over the past six years, should be closer to 10 percent.

“I like the Nevada method. We trade very fair numbers,” he said. “They’re trying to tell us Nevada doesn’t know what we’re doing. … I remember one guy saying the Nevada model isn’t sustainable. Well, I’ve been doing this since the ’70s. That’s six decades.”

Walters said it was largely the job of state gambling regulators to keep operators under control.

“If they don’t do something to intervene in the interests of bettors, this is going to end badly,” he said. “What worries me is the way these sportsbooks treat the ordinary customer. But they can’t do these things if the regulators don’t allow them to.”

“If you have a business, you can run it however you want. But these are privileged licenses. That’s a big difference. And if you don’t believe that, just ask the regulators in Nevada and the casinos there. They tell them every day what they can and can’t do.”

Contact reporter Todd Dewey at [email protected]. Follow @tdewey33 on X.