US Senator targets DraftKings and prediction markets in VIP betting inquiry

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The Backstory

VIP treatment moves from retention tool to political target

The congressional scrutiny facing DraftKings, Kalshi and Polymarket did not emerge in isolation. It is the latest stage of a widening inquiry into how gambling and gambling-adjacent platforms identify, reward and retain their most valuable customers, particularly when those customers may show signs of harm. Sen. Richard Blumenthal’s planned questions for DraftKings and the prediction market operators extend a line of investigation that began with FanDuel’s handling of a high-value bettor and a personalized celebrity video tied to its VIP program.

The issue has become politically potent because it connects several concerns lawmakers have been raising for months: the rapid growth of mobile wagering, the role of sports leagues and athletes in betting promotion, and the emergence of prediction markets that can resemble sports betting while operating under different regulatory structures. The common thread is whether companies have built commercial systems that deepen engagement among users who are already losing heavily or struggling to stop.

The Harper video that widened the inquiry

The immediate catalyst was a 21-second Cameo-style video featuring Philadelphia Phillies player Bryce Harper, arranged through FanDuel for VIP customer Terry Thompson. Thompson later sued FanDuel, alleging the company exploited his gambling addiction. He claims he placed $18.5 million in bets and lost more than $1.5 million while suffering from addiction. Harper was not named as a defendant, and reporting cited in earlier coverage found no evidence that he knew Thompson’s circumstances or that the message would be used in that context.

The video nevertheless raised a regulatory and ethical question: whether personalized messages from athletes or celebrities, even if framed as greetings rather than ads, can function as targeted gambling promotion. The Pennsylvania Gaming Control Board began reviewing the matter after the video became public, a development covered in the review of FanDuel’s personalized celebrity greeting video. That episode exposed a gap between conventional advertising rules and the more intimate customer-management practices used for high-value accounts.

For lawmakers, the concern was not just the Harper message itself. It was what the message suggested about VIP programs: that companies may use bespoke rewards, special access and personal attention to keep lucrative bettors engaged. Those tools can look like premium customer service, but critics argue they can become dangerous when aimed at people exhibiting signs of problematic play.

Congress turns to leagues and player rules

Blumenthal, along with Reps. Paul Tonko and Valerie Foushee, then pressed Major League Baseball and the MLB Players Association for answers. In their inquiry into MLB over the Bryce Harper FanDuel video, the lawmakers asked whether existing rules adequately prevent athletes from being used in ways that could encourage vulnerable customers to keep gambling.

The issue is complicated by the structure of sports partnerships. MLB rules, as previously reported, allow players to enter promotional agreements with betting operators as long as their name, uniform number or likeness is not used to promote wagering on baseball games. But a personalized greeting arranged for a high-value sportsbook customer can sit outside the traditional boundaries of a mass-market betting advertisement. That ambiguity is why lawmakers have pushed for more specific restrictions and clearer league policies.

The stakes extend beyond one player or one operator. Sports leagues have embraced betting partnerships as a major revenue stream since the U.S. Supreme Court opened the door to expanded legal sports wagering in 2018. But as betting companies become more embedded in broadcasts, team sponsorships and fan engagement, lawmakers are asking whether leagues have done enough to separate sports entertainment from gambling inducement, particularly for high-risk consumers.

FanDuel’s response sharpened the divide

FanDuel has resisted calls to shut down its VIP program. In its response to congressional criticism, the company said VIP customers are subject to the same responsible gambling safeguards as other users and that the program provides a higher level of service, not a separate rulebook. FanDuel also said it monitors indicators such as deposit and withdrawal patterns, rising bet sizes, reversed withdrawals and comments suggesting distress.

That response did little to satisfy critics. Tonko argued that the industry’s responsible gambling framework places too much burden on consumers rather than operators. Blumenthal has since said FanDuel’s answers left significant questions unresolved, including which celebrities or athletes have recorded videos for VIP customers, how those customers are selected and what protections prevent such perks from encouraging further losses.

The dispute highlights a central tension in U.S. gambling regulation. Operators often frame VIP programs as service operations, comparable to loyalty departments in travel or financial services. Lawmakers and public health advocates argue the analogy fails because the underlying product can be addictive and because customer value often rises with the amount wagered or lost. If a company gives extra attention to a user showing harmful patterns, the distinction between service and inducement becomes harder to defend.

Prediction markets enter the same debate

Blumenthal’s attention to Kalshi and Polymarket reflects another front in the same policy fight. Prediction markets allow users to trade contracts tied to event outcomes, including sports-related events. Their backers argue they are financial exchanges or information markets. Critics say many products closely resemble sports betting and should face equivalent consumer protections, age limits and integrity rules.

Blumenthal and Sen. Andy Kim introduced the Prediction Markets Security and Integrity Act in March, seeking federal safeguards against manipulation and insider trading while pushing sports event contracts toward state-level betting oversight. The senator’s objections intensified after Polymarket’s partnership with MLB drew his criticism. He argued that platforms offering sports-linked event contracts should not be able to operate under a lighter regulatory regime than licensed sportsbooks, especially if younger users can access them in ways that would be barred in state-regulated betting markets.

The inclusion of Kalshi and Polymarket in the VIP inquiry broadens the question from sportsbooks to the wider ecosystem of wagering-like products. If prediction markets offer incentives, status tiers, merchandise, referrals or other VIP benefits, lawmakers are likely to ask whether those tools create the same risks seen in sportsbook loyalty programs. The policy challenge is that these companies may not fit neatly into existing gambling statutes, leaving state regulators, federal commodities overseers and Congress contesting who should set the rules.

Public health funding frames the broader stakes

Blumenthal’s campaign also sits alongside a broader legislative push to treat gambling addiction as a national public health issue. He and Rep. Andrea Salinas reintroduced the Gambling Addiction Recovery, Investment, and Treatment Act, known as the GRIT Act, which would direct 50% of federal sports excise tax revenue to addiction treatment and research. The proposal, detailed in coverage of lawmakers’ reintroduction of the GRIT Act, reflects a growing argument in Congress that gambling expansion has outpaced support systems for people harmed by it.

That context matters for the current inquiry. Lawmakers are not only seeking after-the-fact explanations for one VIP customer’s treatment. They are testing whether the industry’s self-policing model is sufficient as betting and event-based trading become more accessible, more personalized and more closely tied to sports culture. The answers from DraftKings, Kalshi and Polymarket could shape whether Congress pursues targeted disclosure requirements, new limits on VIP incentives or a more sweeping reconsideration of how high-value customer programs operate in gambling-linked markets.

For operators, the risk is reputational as well as regulatory. VIP programs are commercially important because a small share of customers can generate a disproportionate share of betting volume. But the Harper episode showed how one personalized perk can become evidence in a broader case against the industry’s business practices. Blumenthal’s expanded inquiry signals that lawmakers now see VIP treatment not as a side issue, but as a window into how companies balance revenue growth against consumer protection.