As Sportsbooks Eye Prediction Markets, They Spend Millions to Protect Sports Betting

While DraftKings and FanDuel executives have indicated that prediction markets are key to growth, the industry’s largest operators are simultaneously investing heavily in another fight: protecting traditional sports betting.

Through a network of super PACs and affiliated political organizations, DraftKings, FanDuel, and Fanatics have collectively contributed more than $40 million to state-level political efforts. The funds come amid lawmakers across the country debating sports betting tax increases, advertising restrictions, prop-bet bans, and, in some cases, broader rollbacks of online wagering.

The spending surge comes at a pivotal moment for the industry. On recent earnings calls, executives from DraftKings and Flutter discussed prediction markets as a potential opportunity and are increasingly leaning towards the sector.

Yet despite that interest, sports betting remains the industry’s primary revenue driver, and operators appear increasingly willing to spend politically to protect it.

Prediction Markets May Be the Future, But Sports Betting Pays the Bills

The industry’s growing interest in prediction markets has become one of the biggest gambling stories of 2026.

DraftKings executives described prediction markets as a strategic priority and an acquisition tool for users in non-sports betting states during the company’s first-quarter earnings call. The company has continued investing in exchange infrastructure, including its recently introduced in-house DKeX platform.

Meanwhile, Flutter executives have described prediction markets as “an attractive incremental customer acquisition opportunity.” CFO Rob Coldrake emphasized that the company “will remain very disciplined in terms of our investment around prediction markets and … invest more if [it sees] opportunities to do so.”

Yet, despite the attention prediction markets have received, traditional sports betting remains the foundation of the industry’s business model. That may explain why operators are spending substantial amounts to influence state politics.

According to Federal Election Commission filings, DraftKings, FanDuel, and Fanatics have contributed approximately $42 million to Win for America, a super PAC network created in late 2025.

FanDuel contributed approximately $19.5 million, DraftKings $17.5 million, while Fanatics contributed $4 million. Notably, before this calendar year, Win for America had received only $2 million from DraftKings.

Much of the money raised has flowed through organizations such as American Conservative Fund and American Future, which have then directed resources toward state-level political activity.

The network has funded political efforts in over a dozen states in Q1 alone, spending over $33 million. In several cases, candidates publicly distanced themselves from campaign mailers and advertisements after learning the source of the funding.

Massachusetts Tests the Limits of Sports Betting Reform

Massachusetts, where DraftKings’ headquarters are located, is one example of a growing regulatory environment.

The state is currently considering Sen. John Keenan’s Bettor Health Act. The legislation would ban in-play and prop betting, significantly restrict advertising, and increase taxes on sportsbook operators. The measure advanced from a committee in March but has stalled since then. The legislative session ends in July.

At the same time, recent reporting by WBUR found that DraftKings executives and family members contributed nearly $18,000 to House Speaker Ron Mariano and almost $20,000 to House Ways and Means Chair Aaron Michlewitz earlier this year. DraftKings has also made a $50,000 donation to a nonprofit aligned with Gov. Maura Healey.

The donations occurred as lawmakers weigh the future of Keenan’s proposal and broader questions surrounding sports betting regulation in the Commonwealth.

Both Mariano’s office and Michlewitz’s office told WBUR that campaign contributions do not influence legislative decision-making.

States Reconsider Sports Betting Expansion

Massachusetts is not alone in the broader picture.

While most post-PASPA-era legislation focused on legalization, lawmakers are now increasingly debating restrictions.

Keenan, who voted for legalizing sports betting, is not alone. According to WBUR, lawmakers in nearly a dozen states who previously supported sports betting legalization are now backing measures to tighten regulation. Some observers have described the trend as legislative “buyer’s remorse.”

Ohio Gov. Mike DeWine has emerged as one of the most prominent examples. Earlier this year, DeWine described legalizing sports betting as his “biggest mistake.”

Earlier this year, Colorado lawmakers debated legislation that would have banned prop bets entirely and imposed additional restrictions on betting activity. However, the prop bet provisions were stripped, partly in response to sportsbooks’ warnings about potential revenue losses.

A similar proposal in Louisiana ultimately failed after lawmakers raised concerns about the potential loss of sportsbook tax revenue.

These debates strike at some of the industry’s most profitable products. Prop bets, in particular, have faced increased scrutiny from lawmakers, regulators, and responsible gambling advocates. They argue the wagers encourage rapid betting activity and have been linked to several recent integrity controversies involving athletes.

The Political Spending Campaign Expands

Illinois has emerged as a key battleground. Following tax increases on sportsbooks, industry-backed political groups spent heavily across several legislative races. According to WBUR, one candidate said nearly $200,000 was spent attacking him in the weeks leading up to the primary.

Ohio is another example. In April, lawmakers introduced a bill to eliminate online sports betting across the state. Around the same time, the American Conservative Fund reportedly spent approximately $1 million supporting select Republican primary candidates.

Similar activity emerged elsewhere.

In Alabama, state organizations called for investigations into gambling-linked campaign spending and greater transparency around political donations connected to sports betting interests.

In New York, a state assembly race generated controversy after a PAC funded by DraftKings and FanDuel backed negative advertising against one of the candidates.

Pennsylvania, Texas, and Georgia have also become major battlegrounds.

In Pennsylvania, sports betting interests poured over $8 million into supporting candidates opposing a tax increase on sportsbooks. Meanwhile, in Georgia, gambling-linked political organizations spent more than $10 million in legislative races following another unsuccessful push to legalize sports betting.

In Texas, the American Conservative Fund poured $3.5 million into the affiliated Texas Conservative Fund, likely to influence the 2026 elections.

The Next Battle for Sports Betting

For much of the past decade, the gambling industry’s political efforts focused on legalization.

Today’s political battles look very different.

Instead of debating whether sports betting should exist, lawmakers are increasingly focused on how it should operate, with debates increasingly centered on taxation, advertising restrictions, prop bets, and responsible gambling measures.

Against that backdrop, sportsbook operators appear increasingly willing to invest in state-level politics.

DraftKings CEO Jason Robins acknowledged the industry’s evolving political strategy during the company’s first-quarter earnings call.

We have a super PAC that we formed and are spending in various states,” Robins said. “We’re going to try that strategy out for this election cycle, see how it goes, and then assess whether it’s something that we want to continue doing in future years.”

Prediction markets may represent a future growth opportunity, and operators continue exploring how those products could fit into their long-term strategies. For now, however, traditional sports betting remains the industry’s core business, and they’re looking to protect it.