Sharpton Warns FTC of FanDuel and DraftKings' Dominance Over Sports Betting Market
Reverend Al Sharpton wrote a letter to the Federal Trade Commission (FTC), requesting the agency to assess the possible negative impacts on Black sports bettors and athletes caused by the "gambling duopoly" of DraftKings and FanDuel.
Addressing FTC Chairwoman Lina Khan, Sharpton, the civil rights activist and host of MSNBC, underscored that the prevalence of FanDuel and DraftKings in the US mobile sports betting market diminishes consumer safeguards. Sharpton estimates that around 75% of all US mobile sports wagers are placed through these two providers, and including other competitors like BetMGM, Caesars Sportsbook, and Fanatics, a limited number of companies control about 90% of the domestic mobile betting market.
With a focus on civil rights, Sharpton expressed his concerns about competition fairness, and consumer protection in the market due to the dominance and impact of both companies. "Their dominance and influence have raised serious concerns about competition, fairness, and consumer protection in the market," Sharpton wrote.
His cautionary words are significant in light of studies indicating that minorities, particularly African Americans, might be susceptible to problematic gambling tendencies and are possibly targeted by the industry in exploitative ways.
Sharpton's Concerns Hold Merit
Early research in the regulated sports wagering industry in the United States disclosed that it initially catered mainly to males, many of whom were white and earned over $100,000 annually.
As the industry expanded, more minorities, including African Americans, began engaging in sports betting. A 2023 survey by the NCAA revealed that 68% of young Black adults admitted to betting on sports, decreasing to 63% for Latinos, 55% for Asians, and 54% for whites.
"When a duopoly takes hold, consumers are the biggest losers, and the most vulnerable consumers — including Black Americans — bear the brunt of that harm. Indeed, Black Americans on the whole are more likely to engage in sports betting; among young adults, they engage in sports gambling at a higher rate than any other demographic (68%). They also bet more money than any other ethnic group," Sharpton reasoned.
Though it's unclear what measures the FTC might implement to disrupt the FanDuel/DraftKings duopoly or if it's an active priority for the commission, economic research firms suggest that duopolies come with disadvantages, including the potential for collusion or price-fixing among the involved companies. The FTC has never accused DraftKings and FanDuel of such offenses.
Timing of Sharpton's Warning Is Appropriate
Sharpton's call to action towards the FTC coincides with an apparent transition in the US sports betting industry. Currently, the NCAA is working with regulators to ban proposition bets on its athletes.
Last month, the NBA permanently banned Jontay Porter, formerly of the Toronto Raptors, for life for wagering on games, and the scandal surrounding Shohei Ohtani's former interpreter, Ippei Mizuhara, continues to implicate more professional baseball players in an illegal sports betting ring.
According to Sharpton, if the integrity of the games is compromised by sports betting, Black athletes and customers might be negatively affected. "Sports are at the core of American culture and Black athletes are the center of American sports. If sports betting and gaming run rampant and erode the integrity of the games, that can negatively impact both Black athletes and consumers," Sharpton observed.
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Source: www.casino.org
