At Extreme Investor Network, we strive to bring you the latest and most exclusive business news that will give you an edge in the competitive world of investing. Today, we’re diving into the world of mobile betting with powerhouse DraftKings making a bold move to implement a tax on consumers in states with the highest sports betting tax rates.
DraftKings, led by CEO and co-founder Jason Robins, announced a gaming surcharge on winning bets in states with tax rates exceeding 20%, including Illinois, New York, Pennsylvania, and Vermont. This decision comes as DraftKings reported its first-ever profitable quarter as a public company, with revenue hitting $1.1 billion.
What sets DraftKings apart is its unique approach to taxing bettors’ winnings, a move that Robins hopes will prompt states to reconsider their tax rates. The company aims to balance profitability with customer satisfaction, acknowledging that some customers may drop off due to the new surcharge.
Despite the potential impact on customer betting activity, DraftKings remains bullish on its revenue outlook, raising guidance to $5.05 billion to $5.25 billion for the year. However, the company revised its 2024 adjusted EBITDA guidance downward to between $340 million and $420 million.
Analysts are closely watching DraftKings’ performance, especially in the face of increasing competition in the sports betting industry. With more than 30 states legalizing some form of sports wagering and DraftKings operating in 25 states for mobile sports betting, the company continues to expand its reach and offerings.
In a strategic move, DraftKings also introduced a $1 billion share repurchase program, showcasing confidence in its long-term growth prospects. With a market cap of around $14 billion, DraftKings is positioning itself for continued success in the evolving landscape of sports betting.
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