FTC reviewing DraftKings and FanDuel over marketing claims, report says
The Washington Sun reports the Federal Trade Commission has opened a review of online sportsbooks likely tied to deceptive advertising, as both operators face separate scrutiny in Massachusetts and Michigan.
The Federal Trade Commission has begun a review of online sportsbooks that includes market leaders DraftKings and FanDuel, according to The Washington Sun.
The Sun reported on Tuesday that the review "probably" relates to allegations of deceptive and misleading advertising, citing three sources familiar with the matter. Prediction markets are not expected to fall within its scope.
Both political appointees and career staff at the FTC have taken part in early discussions on the matter, the sources told the newspaper. One source said the review is expected to examine the adverse effects of online sports betting, including elevated rates of suicide, hospitalisation and bankruptcy that researchers have documented.
An FTC spokesperson declined to confirm or deny the review when approached by Legal Sports Report, saying: "FTC investigations are nonpublic so we generally do not comment on whether we are investigating a particular matter."
Spokespeople for both FanDuel and DraftKings told Legal Sports Report that neither company has heard anything from the FTC regarding a review.
The scrutiny adds to a run of pressure on the two operators from state regulators and members of Congress over how they market to customers. FanDuel has faced repeated letters from lawmakers since it emerged over the summer that the operator had sent a personalised video featuring Bryce Harper to a customer in November 2024.
Senator Richard Blumenthal and Representatives Paul Tonko and Valerie Foushee sent an initial letter in August that demanded FanDuel end its VIP programme. The lawmakers are now seeking copies of every celebrity video the operator has sent to VIP customers.
DraftKings is facing separate scrutiny in Massachusetts, where the state's Gaming Commission is reviewing allegations that the operator used artificial intelligence and machine learning to target customers who were losing money, following reporting by The New York Times. Massachusetts regulations bar operators from using AI to make a gaming platform more addictive.
The Michigan Gaming Control Board has not committed to a DraftKings-specific review but said it is "reviewing the issues raised" in that reporting.
Together, the state-level inquiries and the reported federal review point to growing regulatory interest in how the largest US sportsbooks target and retain customers, at a moment when both companies' marketing practices are already under sustained congressional attention.