FTC Trying to Block FanDuel/DraftKings Merger

dfs merger

Matthew Jordan

Monday, June 19, 2017 5:38 PM UTC

Monday, Jun. 19, 2017 5:38 PM UTC

Daily fantasy sports is a bit of a jumbled mess right now in the USA with it legal in some states and not in others. And if the Federal Trade Commission has its way, things could get more complicated soon.

You have likely heard that the top two daily fantasy sites worldwide, DraftKings and FanDuel, had planned to merge operations. It was a no-brainer decision after a 2016 that saw the values of both companies plummet with several states questioning their legality. The merger seemed to be a logical solution to make everyone happy.

Except the Federal Trade Commission, along with the Offices of the Attorneys General in the State of California and the District of Columbia, is filing a complaint to block the merger. The merged company would control about 90 percent of the daily fantasy sports market and that gave the FTC pause. You don’t see Democrats or Republicans agree on much these days, but both the FTC’s acting Republican chairman, Maureen Ohlhausen, and her Democratic colleague, Commissioner Terrell McSweeny, have agreed to challenge the deal.

The complaint seeks a “preliminary injunction” on the deal and alleges “that the combined firm would control more than 90 percent of the U.S. market for paid daily fantasy sports contests,” creating what the statement called a “near monopoly.” DraftKings and FanDuel have argued that they compete against larger, more powerful companies in the broader fantasy sports business, like ESPN and Yahoo.

“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said Tad Lipsky, the acting leader of the FTC’s Bureau of Competition, in a statement Monday. If the FTC gets its way, the merger will be held up pending the result of the trial that is set to start Nov. 21. So it’s unlikely anything is resolved by the start of football season.

If you are a current player at one of those sites, nothing changes for now. Each will continue to operate as an independent and players will be able to use their funds to enter contests as they normally do. Some gambling companies like William Hill, one of Sportsbook Review’s top-rated sites, have shown interest in getting into the daily fantasy sports business.

Sportsbook Review will be offering its own football contests this fall, and unlike DFS they are free to enter. 

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