Illinois’ Tax Hike Spurs DraftKings to Launch PAC
On June 9, DraftKings filed with the Federal Election Commission to launch the DraftKings Inc. Political Action Committee. The primary spark was Illinois’ punishing tax hikes.
A Response to Skyrocketing Taxes
Illinois jacked up its sports betting tax from a flat 15% to a sliding scale hitting 40% for top operators like DraftKings, and tacked on a 50-cent fee per wager, pushing the effective tax rate as high as 60%.
A company spokesperson told The Hill, “The recent tax increase in Illinois makes it harder to provide the best service to our players while it simultaneously incentivizes more players to wager in the unregulated, illegal market.”
DraftKings, alongside rival FanDuel, responded by adding a 50-cent transaction fee on all Illinois bets starting September 1 to offset the tax burden.
But the company’s not stopping there. The new PAC, led by Senior Director of Federal Affairs Lauren Pfingstag Vahey and SVP Deputy General Counsel Griffin Finan, aims to back candidates and policies that ease these pressures and protect the regulated betting market.
Battling an Uneven Playing Field
Illinois’ tax squeeze is part of a broader trend, with states like Wyoming, New Jersey, and Louisiana mulling similar hikes. DraftKings sees this as a threat that could drive bettors to unregulated platforms like Kalshi or Crypto.com, which operate across all 50 states without state taxes or oversight.
“The biggest competition we face is the illegal market,” said James Chisholm, DraftKings’ director of global public affairs, emphasizing the company’s commitment to competing in Illinois despite the costs.
The PAC’s mission is to level the field. By supporting state and federal candidates who align with DraftKings’ interests, the committee will push for policies that bolster legal, regulated betting while curbing the appeal of offshore platforms.
The company’s frustrated, with CEO Jason Robins noting that Illinois’ taxes could force customers to “spend more money or use illegal platforms.” The PAC is a tool to amplify this message and shape legislation that keeps DraftKings competitive.
Navigating a Regulatory Storm
The timing of the PAC’s launch isn’t random. Beyond taxes, DraftKings faces growing scrutiny. Lawmakers have raised antitrust concerns, accusing DraftKings and FanDuel of market dominance after their failed 2016 merger.
Meanwhile, bills like the SAFE Bet Act, proposed by Rep. Paul Tonko, loom as potential federal regulations on gambling ads and consumer protections. DraftKings’ PAC is a proactive strike, aiming to influence these debates and protect its operations.
The company’s no stranger to political engagement, having spent $420,000 on federal lobbying in 2024 and donated $502,000 to President Trump’s inaugural committee.
But the PAC takes things up a notch, letting DraftKings funnel contributions directly to candidates who’ll fight for its interests. As Kent Redfield, a retired University of Illinois professor, put it, spending like this is about “protecting turf” and keeping a seat at the table.
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