FTC Is Reportedly Reviewing Online Sportsbooks, With Advertising Claims the Likely Focus

The Federal Trade Commission has begun an early-stage review of online sportsbooks such as FanDuel and DraftKings, The Washington Sun reported, citing three sources. Nothing is on the record yet: DraftKings says it has had no civil investigative demand and the agency declined to comment.

• Federal Trade Commission (FTC) officials are reviewing the online sports betting industry, The Washington Sun reported on 13 October, citing three sources familiar with the matter who said the focus would probably be allegations of deceptive and misleading advertising
• The sources said the review is at an early stage, involves political appointees and career staff, is expected to centre on FanDuel and DraftKings, and is not expected to include prediction markets such as Kalshi and Polymarket
• DraftKings told the Sun the FTC has not sent it a civil investigative demand, FanDuel said it had not heard from the agency, and an FTC spokesperson declined to comment
• The report follows a New York Times investigation into how DraftKings targets promotions, which has already drawn a proposed class action, and a congressional inquiry into FanDuel's VIP videos
• State regulators have pursued sportsbook promotions for years, including Ohio's 2023 settlement with DraftKings over "free bet" advertising and Connecticut's 2025 settlement under which DraftKings agreed to return more than $3 million to bettors

The FTC Has Reportedly Started Looking at Online Sportsbooks

Officials at the Federal Trade Commission are probing the online sports betting industry, The Washington Sun's Jeff Stein reported on 13 October. Three sources familiar with the matter told the paper that the agency's interest is expected to focus on online sportsbooks such as FanDuel and DraftKings, "probably on allegations of deceptive and misleading advertisements". Both political and career staff have been involved in reviewing the sportsbooks, the sources said, though the evaluation is at an early stage.

According to the same report, the review is not expected to include prediction markets such as Kalshi and Polymarket, while documented harms among users, including suicide, hospitalisations and bankruptcies, are expected to form part of it, one source said.

Nothing has been confirmed on the record. A DraftKings spokesman told the Sun that the FTC has not sent the company a civil investigative demand, the agency's form of subpoena, and FanDuel said it had not heard from the FTC. An FTC spokesperson declined to comment. Both companies have denied wrongdoing. iGaming Times found no FTC inquiry disclosed in DraftKings' or Flutter's SEC filings this year.

Joe Maloney, president of the Sports Betting Alliance, told the Sun that the Responsible Online Gaming Association (ROGA) code of conduct "represents a commitment by ROGA's members to uphold a set of consistent marketing standards", and cited American Gaming Association research putting sportsbooks at 0.8% of television advertising spend in 2024, against 1.4% for alcohol.

The Allegations Already in Play

The New York Times reported on 19 September that DraftKings built a model in 2023 that scored online casino customers by expected losses per promotion, which DraftKings disputes. The report led the Massachusetts Gaming Commission to review how licensed sportsbooks use AI, and a bettor has since filed a proposed class action in Boston. FanDuel is answering Senator Richard Blumenthal and Representatives Paul Tonko and Valerie Foushee over celebrity videos sent to VIP customers, including one from Bryce Harper to a bettor the lawmakers say had lost $1.5 million.

The Sun also quoted Jon Schweppe, a former FTC senior policy adviser under Chairman Andrew Ferguson, now at the American Principles Project, who said sportsbooks are "isolating specific customers who are problem gamblers and psychologically manipulating them".

The FTC's past dealings with the two companies have been about competition, not advertising. In 2017 it moved to block a DraftKings and FanDuel merger over their combined share of paid daily fantasy sports, which it put at more than 90%, and the deal was abandoned. In December 2024 Senators Mike Lee and Peter Welch asked the FTC and the Justice Department to investigate the pair for alleged coordination under the Sherman Act.

Advertising enforcement has so far been left to the states. In January 2023 Ohio's Casino Control Commission sought $150,000 from each of DraftKings, Caesars and BetMGM, saying ads lacked responsible gambling messaging and called bonuses "free" or "risk-free" when bettors had to risk their own money, Cleveland 19 reported. DraftKings settled in February 2023, paying $150,000 on that notice within a $500,000 total, according to WSYX. In July 2025 Connecticut's Department of Consumer Protection said DraftKings had agreed to return more than $3 million to 7,000 consumers who took deposit match or deposit bonus offers between October 2021 and January 2023, and to pay $50,000.

A Federal Case Would Not Need a Federal Gambling Law

An FTC review, if it develops, would sidestep the question that has stalled federal action on betting. The SAFE Bet Act, reintroduced by Blumenthal and Tonko in March 2025, would impose federal standards on state-licensed sportsbooks, including no marketing during live sporting events and no programming that pushes "bonus bets", "no sweat" offers or odds boosts. The FTC needs no new statute: deceptive advertising is, as former FTC attorney Monica Vaca told the Sun, "the bread-and-butter work of the agency". Its own guide on the word "free", in force since 1971, says the conditions of a free offer should appear clearly at the outset, and that terms in a footnote marked by an asterisk do not count. That is the complaint Ohio and Connecticut made about bonus terms, with national reach.

Leaving Out Prediction Markets Would Sharpen an Uneven Contest

If the review does exclude Kalshi and Polymarket, it will land on state-licensed sportsbooks while prediction markets, which operate under federal derivatives oversight rather than state gaming licences, compete for the same sports customers. The Sun noted that the line is already blurring, with sportsbook companies now hosting prediction markets of their own. Operators will argue that scrutinising one side of a converging market tilts it further; critics will answer that the allegations so far, from the Harper video to the DraftKings model, concern the sportsbooks.

Three Unnamed Sources Are a Signal, Not a Case

Everything here rests on unnamed sources describing a preliminary evaluation, and the agency has not confirmed it. A review can end without an investigation, and an investigation without a complaint. The first hard evidence would be a civil investigative demand, which a listed company may choose to disclose in its filings. Until then, the story's weight lies in who is reportedly involved: political appointees at an agency run by a Trump appointee, under an administration the Sun says has embraced the industry.

The reported review would carry state-level complaints about bonus terms and targeted promotions to the federal level for the first time. Whether it does depends on documents nobody has yet received.