DraftKings intends to set up a Political Action Committee (PAC) with hopes of influencing existing and potential regulatory, tax and licensing policies, as well as other issues that impact its business.
The U.S. gaming giant filed with the Federal Election Commission (FEC) on June 9 to establish the DraftKings Inc. Political Action Committee.
The PAC will be headquartered in Fairfax, VA. DraftKings Senior Director of Federal Affairs Lauren Pfingstag Vahey will serve as DraftKings Inc. PAC’s Treasurer, assisted by Senior VP & Deputy General Counsel Griffin Finan.
The company told SBC Americas in a statement that the corporate PAC will support both federal and state electoral candidates and organizations that have shown an interest in issues affecting its operations.
What is a corporate PAC?
PACs are an important tool for political lobbying in the U.S. Via a corporate PAC, a company can gather campaign contributions from members and donate those funds to campaigns for or against candidates, ballot initiatives or legislation.
Corporate PACs, also sometimes known as connected PACs, are funded by a company’s employees, executives and/or stakeholders. However, they are legally obligated to use separate funding from the corporation’s own finances. Corporate PACs can contribute $5,000 per year to a candidate per election cycle but can also be used to support national committees and initiatives at higher levels.
DraftKings is not the first gaming operator to set up a PAC. Companies including MGM Resorts, Caesars Entertainment and fantasy sports operator PrizePicks all have their own such committees, as does the American Gaming Association (AGA), according to Politico.
Why does DraftKings want one?
DraftKings is no stranger to being politically active.
It has engaged in multiple campaigns to alter the gaming landscape in some states, both with and without success. In one example, it spent tens of millions of dollars on a 2022 ballot measure to legalize sports betting in California which ultimately failed. Last year, it had more success after contributing millions to the push to legalize online sports wagering in Missouri.
DraftKings is also a founding member of the Sports Betting Alliance (SBA). With the recent addition of bet365, the group now represents the lobbying interests of five operators, alongside FanDuel, BetMGM and Fanatics.
More broadly, Politico noted that FEC filings show that the operator also spent a total of $420,000 on federal lobbying last year, after donating more than half a million dollars to President Donald Trump’s inaugural committee.
Now, the company has established the PAC to allow it to throw more weight behind supporting certain politicians and measures at both the federal and state levels.
It comes midway through a year in which several states have discussed or ultimately approved sports betting tax hikes, among other legislative changes to the online gambling market, while federal lawmakers such as Rep. Paul Tonko continue to ponder how they may alter the industry through measures such as Tonko’s SAFE Bet Act.
DraftKings cites Illinois tax debacle
In its statement about the PAC filing, DraftKings specifically called out the recent changes to the sports betting tax structure in Illinois.
Last year, the state shifted its online sports wagering tax rate from a flat 15% to a progressive scale that taxes sportsbooks at 40% on any annual adjusted gross revenue above $200 million. DraftKings and FanDuel both pay that rate.
In recent weeks, Gov. J.B. Pritzker approved a 2025 measure that also tacks a 25-cent per-wager tax onto all online sports bets taken by a licensed operator. That fee increases to 50 cents per wager after the first 200 million bets in a year. In response, first FanDuel and then DraftKings announced they would introduce a 50-cent transaction fee on all bets placed on their respective platforms from Sept. 1.
“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,” the company spokesperson told SBC Americas.
“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.”
