Two senators are alleging that DraftKings and FanDuel have labored collectively to keep up their standing because the nation’s high sports activities betting operators and have requested the Federal Trade Commission and Justice Department to research 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 ensure that competition is protected, and consumers continue to benefit from innovation and new offerings in sports entertainment,” the letter famous.
Details 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 day by day fantasy sports activities industries.
That allegedly contains working “in concert to exert pressure on smaller rivals to stymie market access.” The senators argue that this has included interfering in rivals’ relationships with sports activities leagues, advertising companions, fee processing corporations, and distributors. The senators allege that after the merger was blocked, the 2 have nearly acted as a single firm.
Front Office Sports notes that the allegations stem from a report earlier this 12 months from Temple University regulation professor Salil Mehra. He stated that the 2 corporations have greater than 90% of the fantasy sports activities market.
The senators consider a federal investigation is critical to make sure continued innovation within the business in addition to entry to capital for different sports activities betting rivals.
“FanDuel and DraftKings were prevented from merging because it would have substantially lessened competition and harmed consumers by forming a monopoly,” the senators stated. “They should not be allowed to accomplish through collusion what was prevented through acquisition.”
Neither firm has commented on the decision for an investigation. Almost 75% of states now have legalized sports activities betting and the business has seen document revenues in current months. That has included bets totaling $2 billion or extra for September and October in New York.
