DraftKings

• 1. Introduction

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  DraftKings Inc. is an American gambling company based in Boston, Massachusetts, running both a sportsbook and daily fantasy sports contests. As of December 2025, it operates legally in 26 states and holds one of the largest shares of the US sports betting market. The company started in 2012 as a daily fantasy sports provider, competing head to head with the New York based FanDuel. In May 2018, sports betting laws loosened across the country. DraftKings pushed beyond fantasy contests into online and retail sportsbooks. It banked on its brand recognition and its existing customers to carry it into the new business. By April 2020, the company had crossed into public stock markets for the first time. What turned a fantasy sports contest into a nationwide betting company is the story ahead. So are the controversies that followed it.

• 2. From A House To A Rival

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  Jason Robins, Matthew Kalish, and Paul Liberman founded DraftKings in 2012, all three having previously worked together at Vistaprint. The three ran the company out of Liberman's own house before it had any office. Their first product matched players head to head in one-on-one baseball contests. The launch was timed to coincide with Major League Baseball's 2012 opening day. That timing put DraftKings directly up against FanDuel, already the sport's established leader in daily fantasy contests. Within a year, a professional sports league would make an investment in DraftKings unlike anything from a similar rival.

• 3. Investors And Acquisitions

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  In April 2013, Major League Baseball invested in DraftKings, becoming the first American professional sports league to put money into daily fantasy sports. The size of that investment went undisclosed at the time. By February 2014, reports surfaced that DraftKings had paid out $50 million in prizes across 2013. That covered weekly fantasy football and daily fantasy baseball, basketball, and hockey. The same reports put the company's active daily user base at 50,000, with as many as one million players registered overall. That July, DraftKings acquired DraftStreet, a rival then owned by IAC and considered the third largest name in fantasy sports. The deal reportedly grew DraftKings' user base by 50%, and the company kept DraftStreet's New York office open along with some of its staff. The following month, DraftKings announced $41 million in funding from investors including the Raine Group, plus existing backers Redpoint Ventures, GGV Capital, and Accomplice. In that same announcement, the company said it was acquiring the assets of StarStreet, a competitor based in Somerville, Massachusetts. Bigger, more public partnerships were about to follow, starting with a professional hockey league eager for a fantasy sports partner.

• 4. League Deals And Going Overseas

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  In November 2014, DraftKings signed a two-year deal to become the National Hockey League's official daily fantasy sports service. The agreement covered sponsored video features across the NHL's digital platforms, co-branded games with fan prizes, and in-venue advertising during marquee events. Yahoo! Sports kept its role as the league's official season-long fantasy provider. By April 2015, DraftKings struck a similar arrangement with Major League Baseball, offering co-branded daily games and in-stadium fantasy experiences tied to individual MLB clubs. That same month, the company revealed it had collected $304 million in entry fees from users during 2014. In July 2015, DraftKings signed a three-year advertising deal with ESPN worth $250 million. The deal made DraftKings the exclusive daily fantasy sports advertiser across ESPN's networks starting in January 2016. That same month, DraftKings raised $300 million in funding led by Fox Sports. The Kraft Group, owners of the New England Patriots, and Boston's Wellington Management joined the round. The agreement required DraftKings to spend $250 million advertising with Fox Sports over three years. When Disney acquired 21st Century Fox in March 2019, Fox's stake in DraftKings passed to the Walt Disney Company. In August 2015, the UK Gambling Commission granted DraftKings a license for pool wagering, and the company announced plans for a London office. It hired Jeffrey Haas, a veteran of the online poker industry, as Chief International Officer to run its expansion abroad. DraftKings launched in Britain on the 5th of February 2016 with daily fantasy soccer, adapting its handling of the sport for the local audience. The next year, Malta awarded DraftKings a controlled skill games license. That license opened a path into any European Union country permitting gambling under another member state's license, such as Germany. That October, attention would turn from expansion deals toward a data leak and the questions it raised about fair play.

• 5. The Data Leak And Its Fallout

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  On the 5th of October 2015, The New York Times reported that a DraftKings employee had admitted a mistake. The employee had released data before that week's NFL games began. That same employee had won $350,000 on rival site FanDuel during that same week. An internal review found the employee obtained the data only after lineups had locked, meaning it could not have given an unfair advantage. DraftKings and FanDuel each issued a statement declaring, "Nothing is more important... than the integrity of the games we offer to our customers." Both companies pledged to work with the wider fantasy sports industry "so that fans everywhere can continue to enjoy and trust the games they love." The next day, New York attorney general Eric Schneiderman opened an inquiry into both companies, requesting internal data and details of their fraud prevention. ESPN announced on the 6th of October that it would stop running segments sponsored by DraftKings, though its paid advertisements continued for now. By February 2016, ESPN had backed out of its advertising deal with DraftKings entirely, citing legal uncertainty around the service. On the 2nd of May 2016, Idaho attorney general Lawrence Wasden banned both DraftKings and FanDuel from operating in the state, calling them illegal gambling. On the 18th of November 2016, DraftKings and FanDuel announced plans to merge into a company serving more than five million users combined. On the 19th of June 2017, the Federal Trade Commission moved to block the merger with a preliminary injunction. The FTC argued the combined company would control 90% of the US daily fantasy sports market, a monopoly position. Facing that litigation threat, the two companies called off the merger on the 13th of July 2017. In September 2017, DraftKings and FanDuel each paid $1.3 million to settle claims from the Massachusetts attorney general over unfair and deceptive practices before 2016. Less than a year later, a Supreme Court ruling would open a door DraftKings had been waiting for since its founding.

• 6. Sports Betting Goes Legal

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  In May 2018, the Supreme Court of the United States struck down the Professional and Amateur Sports Protection Act of 1992 as unconstitutional. That ruling let states beyond Nevada legalize sports betting for the first time. In August 2018, DraftKings launched its first legal online sportsbook in New Jersey. From that New Jersey launch, DraftKings expanded its sports betting operations across the country. In April 2020, DraftKings completed a reverse merger valued at $3.3 billion, making it a publicly traded company. The merger combined DraftKings with Diamond Eagle Acquisition Corp, a special purpose acquisition company that had gone public in May 2019. It also combined with SBTech Global Ltd, a Europe based provider of sports betting technology. The combined company kept both the DraftKings name and its existing executive management. On the 24th of April 2020, DraftKings shares began trading on the Nasdaq exchange under the ticker symbol DKNG. Hindenburg Research later published a report about SBTech, which had accounted for around 25% of DraftKings' revenue at the time of the merger. The report alleged SBTech had ties to organized crime in Bulgaria and to illegal gambling around the world. A retired basketball star was about to join the company's board, the first of several high profile names DraftKings would bring in over the following years.

• 7. Star Investors And Big Deals

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  In September 2020, retired NBA player Michael Jordan became an investor and board advisor at DraftKings. In March 2021, DraftKings acquired VSiN, the Vegas Stats & Information Network, from the family of sportscaster Brent Musburger. VSiN is a Las Vegas radio and digital network focused on sports betting news and analysis. In December 2021, Colossus Bets sued DraftKings for patent infringement. Colossus claimed DraftKings had infringed seven patents tied to a cash-out feature in its betting and gaming products. On the 11th of September 2023, DraftKings apologized for a promotion tied to the 22nd anniversary of the September 11 attacks. The promotion, criticized for exploiting a national tragedy, encouraged betting on games involving New York based teams and was quickly pulled after public backlash. Also in 2021, DraftKings agreed to pay at least $50 million over three years to distribute a podcast hosted by Dan Le Batard. The agreement was the first major licensing deal for Le Batard's company, Meadowlark Media, and the podcast averages around 10 to 12 million downloads a month. By July 2021, DraftKings had reached a market capitalization of $20.64 billion. In May 2022, DraftKings acquired Golden Nugget Online Gaming. In February 2024, it acquired lottery courier app Jackpocket for $750 million. In July 2024, DraftKings sold VSiN back to the Musburger family. In September 2024, the Securities and Exchange Commission fined DraftKings $200,000 for violating Regulation Fair Disclosure. The violation involved DraftKings' PR team sharing non-public revenue growth information through CEO Jason Robins' personal LinkedIn and X accounts before the company's official earnings release. In December 2024, US senators Mike Lee and Peter Welch wrote to the FTC and the Department of Justice. They accused DraftKings and FanDuel of conspiring to "obstruct or impair competition" in violation of federal antitrust law. The senators urged an investigation into the companies' conduct following their failed 2016 merger attempt. For the fourth quarter of 2024, DraftKings reported a $200 million net loss despite a 13% year over year revenue increase to $1.39 billion. Full year losses reached $507 million, and the company secured a $500 million loan to support expansion, including work on iGaming regulatory challenges. In June 2025, DraftKings filed with the Federal Election Commission to form a corporate political action committee. DraftKings said the committee would work "to support state and federal candidates and organizations who have shown an interest in issues affecting our business." In October 2025, DraftKings announced a deal to acquire prediction platform Railbird, though the terms were not disclosed. In November 2025, ESPN agreed to make DraftKings its official sports betting and odds provider, after ESPN and Penn Entertainment unwound their partnership on ESPN Bet. In December 2025, DraftKings launched DraftKings Predictions, a prediction markets platform letting users bet on and trade contracts tied to sporting and other real world outcomes. None of that growth stopped a wave of lawsuits accusing the company of harming the very customers driving its numbers.

• 8. Lawsuits Over Gambling Harm

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  In December 2024, the spouse and children of a gambler sued DraftKings, alleging the company had encouraged his known gambling addiction. The suit claims the man lost more than $900,000 and argues that betting platforms have a duty to identify and exclude compulsive gamblers. That same month, former client Jeffrey Wan filed a class action in New York federal court, alleging DraftKings unlawfully shared users' personal information with third parties. Wan claims DraftKings used Facebook's pixel tracking tool to record users' website and app activity and send it to Facebook. Later in December 2024, Texas resident Eric Avila filed a class action in the US District Court for the District of Massachusetts. Avila alleges DraftKings fraudulently closed his account under false pretenses and kept him from recovering his remaining balance. In April 2025, the city of Baltimore sued DraftKings and FanDuel. The suit alleges "deceptive and unfair practices by targeting and exploiting vulnerable gamblers in violation of Baltimore's Consumer Protection Ordinance." In May 2025, a similar class action was filed in Pennsylvania, also citing deceptive promotions and predatory advertising. In September 2023, DraftKings suspended credit cards as a payment method. That followed regulatory penalties from the Massachusetts Gaming Commission for violations spanning 2023 and 2024. Those penalties pushed DraftKings into one of its most direct concessions yet, pulling credit cards from its platform entirely.