Sports betting has swept over much of the country over the last few years in the states that have legalized the practice with DraftKings and FanDuel leading the way.
But after years of immense growth, pressure is building as the tides begin to swing back against the industry. Recently, the state of Illinois launched a new tax on sports betting that FanDuel passed on to consumers to the tune of a 50 cent fee for each bet placed. Last year, senators began to raise the issue of FanDuel and DraftKings having a potential duopoly over the sports betting industry. And those inside and outside sports are beginning to note the negative effects of its proliferation.
With all of those headlines, the latest development in the industry doesn’t come as a shock.
DraftKings has launched a Political Action Committee (PAC) just in time for sports betting to come under more regulatory focus.
This is just the latest step in DraftKings beginning to ramp up its political activity. According to Politico, DraftKings spent over $400,000 in political lobbying last year in addition to the donation to Donald Trump’s inauguration.
With DraftKings taking this step, it wouldn’t be a surprise to see FanDuel take a similar step since the two behemoths own so much of the sports betting marketshare. Other companies like MGM or Caesar’s have other gambling interests that sports betting is just a part of. It’s a similar tale for ESPN Bet which is intertwined between Penn Entertainment and Disney.
But it’s a different ballgame when it comes to DraftKings and FanDuel because of their marketplace domination. And whether it’s fighting off potential scrutiny on the pair having a duopoly, increased taxation on bets as we’ve seen in Illinois, or increased regulatory activity, these companies are seeing the writing on the wall when it comes to more of a spotlight being shined on their business practices.
And with many voices beginning to become critical of how sports betting has rapidly gained such a prominent foothold in American life, with some even calling it a public health crisis, the industry’s major players may face an uphill battle in trying to hold on to the gains that it has made in the long run.
About Matt Yoder