FanDuel, DraftKings Save Millions on Taxes Thanks to Free Play

FanDuel and DraftKings commonly use free bets—often referred to as free play—to lure in new bettors, but some states are paying the price in lost tax revenue.

Hundreds of millions of dollars have been left on the table—money that some states had been counting on and promised voters when sports betting was spreading as a popular new tax tool across the country. The shortfall has impacted program funding and forced some states to make up the difference elsewhere. Meanwhile, the industry is hoping the perk catches on with lawmakers in more states.

“Lawmakers aren’t paying attention to this yet, but ...