It’s been a rough week for DraftKings.
The Boston-based bookmaker on Tuesday walked back its proposed “gaming tax surcharge” it planned to levy on winning bettors in the operator’s higher-tax jurisdictions.
Later on Tuesday, DraftKings sent an email blast to users about golf bets many didn't place, telling them two or more players tied for the same winning position and that the wagers were settled using "Dead Heat Reduction" rules.
Per my last email ...
These bets were apparently paid out in amounts less than the wagers, so DraftKings said it would issue the users a bonus bet in the same amount as those mostly non-existent wagers "as a one-time courtesy."
Again, though, it looks like most of these bets were not made at all.
“You may have received an email regarding this past weekend’s golf tournament and the ‘Dead Heat’ rule that was inadvertently sent more broadly than intended,” DraftKings Sportsbook said via its X account. “Please disregard that email.”
You may have received an email regarding this past weekend’s golf tournament and the “Dead Heat” rule that was inadvertently sent more broadly than intended. Please disregard that email.
— DraftKings Sportsbook (@DKSportsbook) August 14, 2024
Some people claimed on social media they received the message even though they didn’t have a DraftKings account or that they hadn’t logged into their account in some time. There were also reports of panic among some users and a rush to log into the operator's site, prompting an outage.
On the positive side, shares of DraftKings opened higher on Wednesday following its decision to scrap the gaming tax surcharge, with the stock trading at around $31.70 as of around 10:30 a.m. ET. DraftKings made the decision after its rivals declined to follow suit.
“We believe the decision to redirect from a surcharge, given the position of competitors and the mixed view from the Street, is likely to generate a positive reaction in the shares,” Jefferies analyst David Katz wrote in a note to clients on Wednesday morning. “Our view has been that operators can mitigate reasonable tax increases gradually over time and this would be the case for DKNG.”
But the good news was followed by word an investment firm has sold off its shares of DraftKings.
Investment firm Coatue 13F reveals - it sold its entire stake in Draftkings in Q2.. it owned more 2.3 million shares of $DKNG
— Contessa Brewer (@contessabrewer) August 14, 2024
