The Federal Trade Commission is reportedly taking a closer look at the online sports betting industry, adding another layer of regulatory attention to a sector already facing questions from state officials and federal lawmakers. The early-stage review includes major operators DraftKings and FanDuel and is expected to examine allegations involving deceptive or misleading advertising.
The Washington Sun first reported the review, citing three people familiar with the matter. Both political appointees and career FTC staff have reportedly participated in the examination. The scope remains preliminary, and an FTC spokesperson declined to confirm an investigation, noting that the agency generally does not comment on nonpublic investigations. DraftKings and FanDuel have said they have not been contacted by the FTC.
The FTC has broad authority over deceptive advertising and unfair business practices. Its established truth-in-advertising standards require advertisements to be truthful and not misleading, with advertisers expected to possess evidence supporting their claims when appropriate. Those standards extend to advertising delivered online, giving the agency a potential avenue to examine how sportsbooks present promotions to consumers.
Exactly what practices the agency may scrutinize has not been officially disclosed. However, the reported review arrives while questions about sportsbook promotions, VIP programs and personalized marketing have become more prominent. Prediction-market operators such as Kalshi and Polymarket are not expected to be included in the FTC review.
DraftKings has separately drawn attention from state regulators over its marketing practices. The Massachusetts Gaming Commission has been reviewing allegations involving the company’s use of artificial intelligence and machine learning to target losing bettors with promotions. Massachusetts regulations prohibit sports wagering operators from using artificial intelligence to make a gaming platform more addictive.
Michigan regulators have also taken notice. The Michigan Gaming Control Board has not announced a DraftKings-specific investigation, but the regulator said it was reviewing issues raised by reporting about the company’s promotional practices. These state-level developments are separate from the reported FTC activity and do not establish that federal regulators have determined the companies violated consumer-protection law.
FanDuel, meanwhile, has faced questions from members of Congress about its VIP marketing. The scrutiny followed reporting that a customer received a personalized Bryce Harper video in November 2024. Sen. Richard Blumenthal and Reps. Paul Tonko and Valerie Foushee subsequently asked the company for information about its VIP program and later sought copies of celebrity videos sent to VIP customers.
That dispute highlights a broader issue potentially relevant to federal advertising oversight: how sportsbooks communicate with individual customers rather than just what appears in traditional television or digital advertisements. The FTC’s advertising standards apply across media, including online marketing, but no public FTC finding has established that DraftKings or FanDuel violated those standards.
Sports betting regulation has largely developed on a state-by-state basis since the Supreme Court’s 2018 decision cleared the way for states to authorize wagering. A federal examination of marketing practices would therefore represent a different form of oversight than the licensing, advertising and responsible-gambling rules administered by individual gaming regulators.
For now, the distinction between a preliminary review and an enforcement action is important. The FTC has not publicly announced charges against DraftKings or FanDuel related to the reported inquiry, and both companies have said they have not heard from the agency. The review nevertheless comes as sportsbook advertising, VIP programs and increasingly personalized promotions receive greater attention from regulators and lawmakers.
