The Federal Trade Commission has started a review of online sportsbooks, including U.S. sports betting leaders DraftKings and FanDuel, according to The Washington Sun.
The Sun reported Tuesday that the review “probably” concerns allegations of deceptive and misleading ads, citing three sources familiar with the review. Prediction markets are not expected to be included in the review.
An FTC spokesperson declined to comment to LSR: “FTC investigations are nonpublic so we generally do not comment on whether we are investigating a particular matter.”
FanDuel and DraftKings have come under heavy scrutiny from state regulators and members of Congress over allegations of deceptive marketing practices.
Spokespeople from both operators confirmed to LSR that the companies have not heard anything from the FTC.
More details of sports betting review
Both political appointees and career staff at the FTC have been involved in the early discussions, according to those sources who spoke with The Sun.
The adverse effects of online sports betting, including increased rates of suicide, hospitalizations and bankruptcies documented by researchers, are expected to be part of the review, one of the sources said.
FanDuel and DraftKings under fire
The two market leaders in sports betting and online casino have faced mounting criticism in recent months.
Three members of Congress have sent multiple letters to FanDuel after it was reported over the summer that the operator sent a personalized Bryce Harper video to a customer in November 2024. That prompted Sen. Richard Blumenthal (D-CT) and U.S. Reps. Paul Tonko (D-NY) and Valerie Foushee (D-NC) to send an initial letter in August that “strongly demanded” the operator end its VIP program.
The lawmakers are now demanding copies of all celebrity videos sent to VIP customers.
The Massachusetts Gaming Commission is reviewing DraftKings’ alleged use of AI and machine learning to target losing bettors, following a report by the New York Times. The commission’s regulations prohibit the use of AI “to make the gaming platform more addictive.”
The Michigan Gaming Control Board did not commit to a review specific to DraftKings but said it is “reviewing the issues raised” in the report.
