DraftKings Launches New Odds Boost Subscription Feature in New York

DraftKings is taking a bold approach to offset the 51% tax rate in New York and has announced the introduction of DraftKings Sportsbook+, a subscription service that will enhance parlay odds for those who join.

Parlay Adoption

It is public knowledge that sportsbooks make higher margins on parlay betting. Bettors enjoy the chance to risk a little to win a lot while the sports betting platforms are eager to give the people what they want as parlays lose more often than they win. A bettor must win each leg of the parlay for it to pay, which is easier said than done.

It is the same rationale that people use to buy a lottery ticket, but the chances of hitting a parlay are much better, and the payouts can be well worth the risk.

DraftKings understands the allure of parlay betting and the profits that stem from it and has announced a subscription service called DraftKings Sportsbook+, which will increase parlay odds at a cost of $20 per month. The service is exclusive to “select, eligible customers” in New York but did not elaborate on how those customers are eligible.  

The more legs in the parlay, the greater the odds boost. For example, a 2-leg parlay may see its odds increased by 10%, while those with 11 legs or more could see the odds doubled. But the more generous odds will be available only to those who subscribe to the service, which is free for the first month for those who are extended the offer and will cost $20 per month thereafter. The maximum bet is reported to be $25 per parlay.

Tax Mitigation

Sports betting operators pay a heavy price for competing in the nation’s most lucrative betting market. The Empire State imposes a 51% tax on sportsbooks’ revenues, the highest in the nation, along with New Hampshire. DraftKings was granted exclusivity in small-market New Hampshire in exchange for the much higher-than-average tax rate on an agreement that is renewed every two years.

But there is no such clause in New York, and the competition is fierce. There are nine online sportsbooks operating in the market, but DraftKings and FanDuel control 70% of the betting in the state, with the rest chasing the dominant duopoly that also controls roughly the same amount in markets across the nation.

The onerous tax rate has been the subject of much consternation by the sports betting platforms. To mitigate some of that tax burden, DraftKings contemplated adding a surcharge to winning wagers in August 2024 before the company retreated upon learning FanDuel would not follow its lead.

Nevertheless, the subject of online casino gambling has been broached, and if approved in New York, its revenues would dwarf those emanating from sports betting. However, iGaming has been a sector that only seven of the 38 sports betting states have entered, and it is unclear whether New York legislators are willing to make that its next gambling frontier.