Online Sports Betting Firms Increase Election Spending Amid Competition

DraftKings, FanDuel, and other online sports betting companies have dramatically increased their funding for the U.S. midterm elections, reaching at least $72 million. This revelation comes as prediction markets like Kalshi and Polymarket introduce new challenges to the industry, prompting additional scrutiny.

The U.S. online sports gambling sector faces fresh competition from these prediction markets, which are viewed by some as a direct threat. Under President Donald Trump’s administration, these emerging markets have gained attention.

This industry has become the third-largest corporate contributor to the U.S. midterms, following the crypto and technology sectors, as estimated by the watchdog group Public Citizen. These companies aim to elect candidates who are sympathetic to their interests.

Super PACs and Political Influence

Online platforms such as DraftKings, FanDuel, Fanatics, and the UK-based bet365 have financially backed Win for America. This Super PAC channels funds to two affiliate PACs — American Future and the American Conservative Fund — targeting both Democratic and Republican state races, respectively.

Super PACs in the U.S. can accept unlimited corporate and individual donations and spend without limits in support of specific candidates, provided they don’t coordinate with or donate directly to the candidates’ campaigns. Public Citizen indicates that Win for America was established last year, marking an unprecedented financial involvement for the industry.

Win for America is ramping up to be another corporate money juggernaut.

Rick Claypool, research director for the nonprofit, likens it to heavy spenders in AI and the crypto sector, each surpassing $100 million in midterm expenses.

Impact on State Races

Contributions from these companies do not automatically ensure legislative support, but they hope the financial investments will yield favorable outcomes. In Georgia, for example, Win for America directed more than $12 million into state races through its smaller PACs. Most candidates backed by these funds were successful, with the exception of two.

In Pennsylvania, Win for America is actively opposing legislative efforts to raise taxes on the online sports betting industry, which is being considered as a means to increase public transportation funding.

Funding Dynamics

Initially, $43 million was funneled into Win for America, with an additional $29 million later contributed. However, federal records do not cover all state-level spending or allocations to dark money groups that are not required to disclose their donors.

DraftKings, FanDuel, Fanatics, and BetMGM established the Sports Betting Alliance in 2021, aiming to lobby for the legality of online gaming. BetMGM has not contributed to this Super PAC.

DraftKings has provided at least $34 million to Win for America, followed by FanDuel with $27 million, and both bet365 and Fanatics with $5.5 million each. Bet365’s contributions come through its U.S. subsidiary, Hillside (Shared Services US) LLC.

Additionally, DraftKings has donated over $1 million to other political committees, while FanDuel has added $2 million in contributions.

Legalization and Lobbying Efforts

The Supreme Court’s 2018 decision allowed states to legalize sports betting, leading to 39 states and the District of Columbia permitting some form of it. Thirty-three of these states allow online sports betting.

Campaign finance watchdog OpenSecrets reports that the industry has stepped up its lobbying efforts in response. FanDuel spent $1.1 million on lobbying in 2022, a significant increase from previous years, while DraftKings more than doubled its lobbying expenditure to approximately $900,000.