At the end of 2024 DraftKings rolled out a new option for players which gives a boost to parlay and same game parlay bets in exchange for a $20 monthly subscription. It is currently being tested in New York state and those who signed up for the subscription got the first month free. While this “offer” is only in New York now, the company said it will roll it out to more states when the time is right.
The parlay offers a 10% boost on 2-game parlays and increases by 10% for each game added, meaning that if you bet a 6-game parlay you would get a 50% boost and it tops up at 11 or more games where the bettor would get a 100% boost. There are no limits to the number of parlays that can be bet. It sounds intriguing until one looks at the specifics. Each game must have minimal odds of -500 (1 to 5), there can be no correlated options, there’s a $25 maximum wager and the maximum payout is $200,000. While that sounds exciting, a friend I spoke to in Syracuse, NY who signed up said that almost every parlay he tried to place was rejected because “the bet options can’t be combined.”
Is the subscription a good offer?
But here’s the question, is this really that good an offer? Depending on the sport and bet, lines will generally be 20 or 30 cents for a head-to-head matchup. At 30 cents, the theoretical hold for a sportsbook is 6.52% and for a 20-cent line the hold is 4.55%. 
So, a bet on a 2-team golf parlay with 2 golfers at -115 odds gives the book a hold of 13% making the 10% boost pretty irrelevant. Even if both teams are -110, the hold for the book on a 2-team parlay is 9.3% so the 10% boost is good, but considering the $25 limit, it would be very difficult for players to make back the $20 monthly cost at that rate. And if one were to combine 11 games, the hold for a 30-cent line is just over 100% and about 64% for a 20-cent line. So, at the 30-cent line DraftKings is still ahead of what the true payout should be with no vig. It’s effectively like craps where you outlay the $20 on the pass line and then play 10x the bet behind the original wager to get true odds. Yes, it’s better than without that option but nobody is going to get rich and it costs the casino nothing. Most sharp bettors are not going to play 6 to 10 team parlays so they will see little benefit in this service, not to mention that they would probably bet far more than $25. This subscription is clearly geared to the novice bettor (in a statement a DK representative said these parlays are very appealing to millennials), and since DraftKings has been accused on social media of constantly of cutting off winners, then if there is a player who has figured out a way to use the boosts to become bigger winners, they will likely be told that they can no longer use the subscription service.
Boosts are commonplace
Parlay and SGP boosts are nothing new. Look on any site and you will see an option to boost your winnings anywhere from 20% to 50%. They are usually restricted to certain games or events such as the NFL playoffs, but there are usually far fewer restrictions. 
At Bet365 and BetMGM for example the only requirement for a boosted 3-game parlay is that the bets include three or more legs and the total odds for the bet be even money or higher. And Bet365 has a stepped-up parlay option for all bettors FREE OF CHARGE! A 2-game parlay offers a 2.5% boost with an additional 2.5% boost for all extra games up to 7 legs. From 8 to 15 legs there is an additional 5% boost for every leg. And for 17 games and up there is a 10% boost. At 20 legs the total boost is 100%. Unlike DraftKings the minimum odds per leg is -1000 (1/10) which opens it up to far more wagers on players like Novak Djokovic or a money line wager where a team is a 20 point favorite but 1/10 on the money line. The wager applies to all major sports as well as MMA, tennis, golf matchups and even Korean baseball. There are some sports excluded, but that is the case with the DraftKings’ subscription too. Bet365 offers this to customers worldwide and looking around the web I found five other sports betting companies that offer similar stepped up parlay boosts and none of them require a subscription to bet them. Other non-U.S. sportsbooks offer sweeter deals that appeal to bettors as well, such as automatic money line payouts when a hockey team goes up 3 goals, a basketball team goes up by 20 points or an NFL or NCAA football team goes up by 17 points. Those types of offers are few and far between at the more popular U.S. based books.
DraftKings equates the subscription option to ones offered by Uber and RobinHood where someone can get lower fees and fares for a monthly subscription. I equate it more to paywalls on various news sites or even the blue check option on X where the only real benefit is the ability to create larger tweets and pretend that you are more important than you truly are because you paid $8 a month to Elon Musk for a verified checkmark.
Offsetting high tax rates
In fairness to DraftKings and other books like FanDuel or ESPNBet, despite all efforts to make a profit in high tax states, they realized that it just isn’t possible. At New York’s 51% tax rate they would have to be a monopoly and do zero advertising to see a real profit. So, books are trying to figure out other ways to increase revenue to offset the tax. No doubt all states with tax rates over 20% are on the radar. Earlier in 2024 DraftKings CEO Jason Robins announced the company was looking to add a surcharge to any winning bets where the tax rate was greater than 20%, but that plan went over with bettors like a lead balloon, and when FanDuel, Caesars and MGM said they would not be doing the same, it appears Robins backed out and went back to square one. With the subscription, he figured out a different way to tax bettors while making it look like they weren’t charging a surcharge and instead were doing bettors a favor. In many ways it’s like the lotteries that promise people the opportunity to get rich and live a lifestyle beyond their wildest dreams even though lottery players have a better chance of being struck by lightning three times than winning the Powerball or Mega Millions jackpot. And one can just see the smiles that are likely emanating from DrafKings’ board at the thought of novice bettors playing dozens of $25 11 team parlays each week hoping to get rich. Even if the odd one comes in DraftKings will be far ahead in the end.
When it comes to New York and other high tax U.S. states, companies like DraftKings and FanDuel are in a conundrum. New York had over $20 billion bet on sports last year which far exceeds any other state, but the 51% tax makes it impossible to be profitable. Those books can’t simply leave the state and pass up on the opportunity to profit should the rate ever come down, but they can’t lose money forever. No doubt the 9 books that have licenses to operate in New York hoped that a few more operators would join to drop the tax down to 35%, based on the tax matrix that was set up by Governor Andrew Cuomo in 2021. But, as I have noted in prior articles, other sportsbooks are leaving the U.S. rather than coming aboard. BetFred, a very large UK sportsbook, is the latest to announce they were leaving the U.S. altogether. And companies like Betway and Unibet found the exit long ago. To make it worse, in New York, WynnBet left last year dropping the number of books from 10 to 9 meaning the state would have to somehow find 5 more operators interested in New York to drop the rate to 35% and other than Bet365 it’s hard to think of any that would be willing to take the risk. Companies like MGM could apply for a license using the LeoVegas or Tipico brand they bought but that would be adding fuel to the fire, not to mention that the state may announce that any operators have to be independent of the others.
New York is also clearly not that interested in lowering the rate. The tax revenue they raised last year was higher than Illinois, Pennsylvania, Ohio, North Carolina, New Jersey and Massachusetts combined. The New York revenue had Illinois looking to raise their tax rate from 15% to 40%, which got shot down. But other states are presumably looking at New York’s revenue and trying to figure out if they can also boost coffers by simply raising the rates, which would not come across as an outright tax to bettors. A higher tax paid by operators is one such way since it’s invisible to bettors. If New York is willing to do anything to help the sportsbooks it will likely be to legalize online casino wagering, which could have a lower tax rate than sports and could help books generate ancillary revenue.
There is a story in the news this week of a bettor who played a 14-team parlay for 85 cents at FanDuel and would have won $147,507.44 when Ohio State won the NCAA football championship on Monday. Before the first round of the playoffs, he sold the ticket on WagerWire for $16,750 and likely now is kicking himself although he told Fox he has no regrets. But just think if the bettor had the option of the new DraftKings subscription he would have only had to wager 43 cents to get that payout. Mind you that ticket included a lot of divisional winners and championship winners and it is not clear if those types of bets would be allowed for the parlays on the subscription service or if it is limited to single games and matches.
Any way you slice it, one cannot disparage DraftKings for looking for ways to offset the obscene taxes in some states but as always, it’s the naïve bettor who pays the price.
Read articles on sports betting and the North American gambling industry from Hartley Henderson here at GamblersWORLD.
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