Political Action Committee Launched by DraftKings
June 20, 2025, 03:18h.
Last updated on: June 20, 2025, 03:18h.
DraftKings Forms Political PAC to Boost Influence in State and Federal Politics
DraftKings joins the political realm to lobby for sports betting regulation and taxation Illinois' tax hike on sports betting could have served as a catalyst
In a move likely spurred by the recent Illinois tax increase on internet sports betting, DraftKings (NASDAQ: DKNG) established its first political action committee (PAC) to wield power in the realm of federal and state politics, according to a Form 1 filing with the Federal Election Commission (FEC).
This PAC will follow the guidelines of Separate Segregated Funds (SSF), allowing DraftKings to approach donors with ties to the company. SSFs, tailored for corporations, labor unions, membership organizations, and trade associations, can collect funds only from affiliated individuals.
While DraftKings PAC, headquartered in Fairfax, Va., and represented by Five Rings Law, will mainly target federal and state candidates, it might also extend its reach to other constituencies. The primary reason for the PAC's creation lies in the fact that sports wagering is heavily regulated, particularly at the state level.
State Action: Illinois Raises the StakesIronically, Illinois' latest tax increase on sports betting could serve as a primary factor behind DraftKings' political foray. The state recently enacted a new law, hiking the tax applied to an operator's first 20 million booked bets to 25 cents, and charging 50 cents for any subsequent action.
DraftKings CEO Jason Robins expressed his dismay over the Illinois politicians' failure to warn him about the pending tax increase, revealing the operator's surprise upon hearing the news in a recent CNBC interview.
Political Advantage in a Competitive MarketThe sports betting landscape is becoming increasingly competitive, fueled by escalating taxes and increased political scrutiny. Aggressive lobbying, particularly at the state level, is a smart move for companies such as DraftKings, which aims to influence policy decisions and protect its market share.
Contrary to belief, DraftKings has previously been an active participant in political circles, contributing considerable financial support to various candidates over the last three federal election cycles. The majority of these contributions went to Democratic candidates; however, the industry's shifting dynamics warrants bipartisanship to ensure growth and operational freedom.
During the past few years, several states have raised related taxes, with more likely to follow. Moreover, bills to legalize the activity or expand iGaming are yet to gain traction, further underscoring the need for DraftKings to assert its political stance.
References:1. Forbes2. The Hill3. Bloomberg Law4. CBS Sports5. ESPN
- DraftKings, in response to the recent Illinois tax increase on internet sports betting, has formed a Political Action Committee (PAC) to engage in state and federal politics.
- The newly established DraftKings PAC, following the guidelines of Separate Segregated Funds (SSF), aims to influence policy decisions related to sports wagering regulation and taxation.
- In light of escalating taxes and increased political scrutiny in sports betting, DraftKings' political foray could provide a competitive advantage in safeguarding its market share.
- With more states likely to raise related taxes or introduce bills to legalize sports betting or expand iGaming, DraftKings' recent political move underscores the need to assert a prominent political stance in the industry.
