Two senators are alleging that DraftKings and FanDuel have labored collectively to keep up their standing because the nation’s prime sports activities betting operators and have requested the Federal Commerce Fee and Justice Division to analyze the 2 corporations.
Sen. Mike Lee®, of Utah, and Sen. Peter Welch (D), of Vermont, launched a letter final week expressing their issues and calling for a probe.
“We urge you to look into these allegations to make sure that competitors is protected, and shoppers proceed to profit from innovation and new choices in sports activities leisure,” the letter famous.
Particulars On The Allegations
The senators famous that the 2 corporations tried a merger in 2017, however that the FTC, state of California, and Washington D.C. helped block that deal. The letter alleges that the 2 have since been engaged in anticompetitive practices to retain their dominance within the sports activities betting and every day fantasy sports activities industries.
That allegedly consists of working “in live performance to exert stress on smaller rivals to stymie market entry.” The senators argue that this has included interfering in rivals’ relationships with sports activities leagues, advertising and marketing companions, fee processing corporations, and distributors. The senators allege that after the merger was blocked, the 2 have just about acted as a single firm.
Entrance Workplace Sports activities notes that the allegations stem from a report earlier this yr from Temple College regulation professor Salil Mehra. He mentioned that the 2 corporations have greater than 90% of the fantasy sports activities market.
The senators imagine a federal investigation is critical to make sure continued innovation within the trade in addition to entry to capital for different sports activities betting rivals.
“FanDuel and DraftKings had been prevented from merging as a result of it will have considerably lessened competitors and harmed shoppers by forming a monopoly,” the senators mentioned. “They shouldn’t be allowed to perform by way of collusion what was prevented by way of acquisition.”
Neither firm has commented on the decision for an investigation. Virtually 75% of states now have legalized sports activities betting and the trade has seen report revenues in latest months. That has included bets totaling $2 billion or extra for September and October in New York.
