DraftKings Customers In Pennsylvania Are Seeing A Cutback In Company’s Generosity

Among the benefits of online sportsbooks are the ways they incentivize recreational bettors with special offers — even free money and can’t-lose bets — to attract business.

Join a site new, and get a big risk-free bet or deposit match. Play as an existing customer, and receive occasional promotional offers like vastly enhanced odds for the success of a certain team or player.

Such offers aren’t available when you walk up to the window of a casino’s retail sportsbook, and DraftKings has been a leader in providing them. Since the time the Boston-based company launched in Pennsylvania in November 2019, only FanDuel has given away more to customers.

The giveaways are listed as untaxed “promotional credits” by the Pennsylvania Gaming Control Board, and its monthly revenue reports show DraftKings with $19.1 million of the $75 million in such credits provided by all online sportsbooks statewide from December 2019 to November 2020.

FanDuel gave out $30 million in that time span, so between them, the two fantasy/sports betting titans were responsible for nearly two-thirds of all the credits provided to bettors.

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But something curious has arisen in recent months. DraftKings has had a sharp dropoff in such offers, while the same is not true of its primary competitor. Its Pennsylvania customers are not necessarily receiving the same generous incentives available to counterparts in the operator’s other states.

Offers remain high around state despite DK

The COVID-19 pandemic has made it a crazy year for the sports calendar, and thus, for sportsbooks, which saw just a trickle of their normal activity from spring to early summer. The volume of promotional credits likewise dwindled.

But when major sports competition all converged in late summer, there was also great competition among sportsbooks to attract and retain customers. Promotional credits in August jumped from $5.5 million in July to $9.3 million statewide, including $3.6 million from both DraftKings and FanDuel.

Statewide, the credits increased again in September and have exceeded $11 million in each month since. FanDuel’s credits amounted to nearly $5 million itself last month.

But for DraftKings, the offers fell from that $3.6 million in August — the most ever for the company — to $2.3 million in both September and October and less than $1.7 million in November.

And the individual offers in Pennsylvania compared to other states in recent months provide anecdotal evidence of just how that variance has shown up for customers.

What if Embiid’s back had acted up on opening night?

The wildly generous offers that would jump out to any half-knowledgeable sports fan concerning individual games or player performances always have betting limits — frequently $25, sometimes $50 — so they hold far more appeal for the recreational bettor than a professional gambler.

But here are a few examples of what DraftKings’ Pennsylvania customers have missed out on:

  • For the opening of the NBA season last week, DK customers in other states could bet the two opening-night games getting a 75-point spread on any team they wanted. That giveaway was unavailable to Pennsylvania customers, who were instead given the chance to bet up to $25 at even money that 76ers center Joel Embiid would score at least eight points in the team’s Dec. 23 opener vs. the Washington Wizards. (He scored 29.)
  • For a Dec. 20 game between the Kansas City Chiefs and the New Orleans Saints, bettors in other states could wager up to $25 at +300 that Patrick Mahomes would throw at least one TD pass. (He threw three.) The offer was unavailable in Pennsylvania.
  • Prior to the Dec. 8 game between the Baltimore Ravens and Dallas Cowboys, bettors elsewhere could wager up to $25 at even money that Lamar Jackson would have at least one completion. The offer in Pennsylvania was also generous but harder to hit: even money that the Ravens QB would run or throw for at least one TD. (Jackson ended up with 12 completions, two passing TDs, and one rushing score.)
  • Only DraftKings customers outside of Pennsylvania were offered an even-money bet for the Cowboys-Washington Thanksgiving game that at least one touchdown would be scored. (There were six TDs total in a 41-16 Washington victory.)

In the case of the Embiid and Jackson offers, Pennsylvania bettors taking advantage would have ended up with just as much profit as those wagering on the offers in the other states.

Still, there was a distinction, in that the PA offers were less automatic. An injury early in the contest to either player would have cost Pennsylvania customers money. (Embiid ended up missing the Sixers’ third game with back issues.)

Could high tax rate finally be a factor?

Penn Bets reached out by email to DraftKings’ media office this week, seeking explanation or comment concerning the cutback in offers and difference from other states. The company did not offer a reply.

In the sports betting world, among both operators and handicappers, much has been made since Pennsylvania’s legalization of its comparatively high 36% tax rate and whether that would impair what the operators can offer customers.

With each new online site’s launch, however, there has been little to indicate any such disadvantage. Odds and offers have generally been similar in Pennsylvania to elsewhere, and this is what Jamie Shea, DraftKings head of sportsbook digital, told Penn Bets on the topic upon launch in the state 13 months ago:

“Yes, of course we’d prefer the tax rate to be lower, but we made a business decision to come into Pennsylvania knowing that we wanted to give the best customer experience, so that’s not being passed down to customers.”

Even if there’s a question now if that’s still true, based on the distinction in Pennsylvania offers, there’s no question DraftKings customers have plenty they can take advantage of.

Its $1.7 million in November promotional credits was easily the second most in the state. (Barstool Sportsbook was third with $1.1 million.) Its customers betting on the NBA could obtain a 20% profit boost on any game since the season’s start.

And for new customers right now, a 20% percent match is offered on initial deposits and a $1 bet can be placed on any college football team to win the national championship with a $100 payout.

Over at FanDuel, meanwhile? Its “Spread the Love” promotion for the Monday Night Football contest between the Buffalo Bills and New England Patriots was offered in Pennsylvania the same as in other states. For every 2,500 bettors wagering up to $50 on the Bills, the point spread shifted by a point in their favor. By 7 p.m. Monday, the Bills were a 109-point underdog.

Buffalo won, 38-9, awarding a potential $45.45 profit to FanDuel customers in Pennsylvania and elsewhere.

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