DraftKings, which in the last decade has grown from a daily fantasy sports site to one of the nation’s largest and most profitable sportsbook and online casino companies, is ready to leverage its lobbying power.
But not as much as $4.8 billion in 2024 revenue would seemingly buy.
According to a filing with the Federal Election Commission (FEC), the company on June 9 will set up DraftKings Inc. Political Action Committee, doing business as DraftKings PAC.
Corporate PACs, despite the name, are funded by employees, executives and stakeholders. They are legally bound to operate using a separate fund from corporate monies. Corporate PACs may only contribute $5,000 per year to a candidate per election cycle but can also support national committees and initiatives at higher levels.
That’s still influential, Lloyd Danzig, the managing partner of venture capital firm Sharp Alpha Advisors, told InGame.
“Even a modestly funded PAC can open doors in Washington and state capitols,” he said, noting he has no specific knowledge of DraftKings PAC. “Lawmakers take note of companies that support their campaigns, even in small amounts.”
A DraftKings spokesperson said the PAC “allows for eligible DraftKings employees, board members and other eligible individuals who share our goal of providing the best-possible platform and experience to support state and federal candidates and organizations who have shown an interest in issues affecting our business.”
“As a technology company operating in a dynamic and highly regulated sector, DraftKings is committed to constructive engagement with policymakers at both the state and federal level,” the company said.
According to the Public Affairs Council, corporate PACs “represent the most transparent money in the campaign finance system.”
DraftKings has long been a politically active campaign contributor.
Gambling companies put chips on the table
National gambling companies have attempted to ply their wealth into political influence before, most vigorously since the repeal of the Professional and Amateur Sports Protection Act in 2018 permitted states to legalize sports betting.
It’s often been a bad buy for market-leaders DraftKings and FanDuel as they attempt to defend and acquire turf. They collectively spent $70 million in a failed 2022 ballot measure to legalize sports betting in California — this after after chipping in $20 million in 2021 to fund a Florida constitutional amendment measure attempting unsuccessfully to carve out spots in a sports betting market that became a monopoly for the Seminole Tribe of Florida.
Rivals MGM Resorts, Caesars Entertainment, and Las Vegas Sands have also contributed to various political campaigns as a means of improving their future prospects in a state or nationally.
DraftKings PAC has work to do in halls of power
DraftKings PAC has its pick of battles.
Illinois recently imposed a tax on sports bets that could add 50 cents to each transaction. DraftKings and FanDuel have so far been the only sportsbooks generating enough business to incur a tax that begins at 25 cents and escalates to 50 cents. Several other states are considering or have imposed their own new taxes on sports betting.
Meanwhile, state legislators in the next few years will mull burgeoning sweepstakes casino legislation that competes with regulated offerings like those offered by DraftKings.
The DraftKings spokesperson noted the Illinois tax hike in explaining future priorities for DraftKings PAC to InGame:
“DraftKings’ ultimate goal is to build the best, most trusted, and most customer-centric destination for our players. The recent tax increase in Illinois makes it harder to provide the best service to our players while it simultaneously incentivizes more players to wager in the unregulated, illegal market.
“Among other things, we are monitoring a range of regulatory, tax, and licensing policies around the country, including the recent tax increase in Illinois. In addition, DraftKings may prioritize issues that impact business operations, including the expansion of the legal, regulated online betting market.”
