Three of the leading sportsbooks in the US, FanDuel, DraftKings, and Fanatics, are investing heavily in political spending as they lobby for favorable gambling markets.
The companies contributed $42 million to the Super PAC Win for America last quarter, a dramatic increase from previous spending.
As detailed by Gaming America, the money has then been funneled into various other organizations, including $7.3 million to DraftKings’ America Future PAC, formed last year.
DraftKings previously invested $2 million in Win for America and added $17.5 million this quarter. FanDuel matched that by contributing $19.5 million. It is unclear if the two rival companies have coordinated their efforts.
Both remain members of the Sports Betting Alliance (SBA), along with Fanatics, which contributed $4 million.
Betting on Texas and Georgia Legalization
Of the $42 million, $26.1 million went to the American Conservative Fund. This is divided into various political and media groups, including $6.4 million to the American Conservative Fund of Georgia.
Efforts to legalize sports betting have so far failed in the state, although a committee recommended allowing online wagering last year. Increased funding could lead more lawmakers to join calls to relax Georgia’s strict anti-gambling laws.
A further $3.5 million went to the Texas Conservative Fund. Gambling companies are making concerted efforts to fund pro-gambling movements in the country’s second most state. As well as sportsbooks, Las Vegas Sands has been pushing for the state to allow it to build a commercial casino in North Texas.
Legal online betting could open the states to esports gambling, although prediction markets already offer a wide range of esports markets there.
Preserving Established Markets
In addition to expanding into new states, the spending is also focusing on maintaining favorable conditions in existing markets.
The American Future PAC has primarily given funds to politicians in Illinois that support reducing taxes on gambling. Lawmakers have been divided over a per-bet tax and a new Chicago tax on gambling.
This quarter, the three sportsbooks also contributed $3 million to the Win for Pennsylvania PAC. Pennsylvania already has legal online casinos and sports betting, but charges operators a hefty 36% tax on gaming revenue.
The donations aim to ensure this does not rise further to match the highest tax rates, such as New York’s 51% tax on operators’ revenue.
Will The Gamble Pay Off?
Whether the spending pays off or not remains to be seen. DraftKings and FanDuel spent heavily pushing for legal sports betting in California, only for voters to reject a proposal to legalize it.
The companies have struggled to generate profits since sports betting became legal across the US, instead they have invested in opening new markets and advertising.
DraftKings finally posted positive numbers at the end of last year, but only marginally. Along with FanDuel and Fanatics, the company is also betting on prediction markets as a way to expand its user base.
Established platforms, such as Kalshi and Polymarket, are also expanding their lobbying efforts along with commercial and tribal casinos. Is funneling more funds into super PACs a route to more profits or a drain on resources? Only time will tell.