A pair of lawmakers have sent a letter to the heads of two U.S. antitrust agencies raising concerns that DraftKings and FanDuel are blocking competition from emerging sports betting operators.
U.S. Sens. Mike Lee, R-Utah, and Peter Welch, D-Vt., sent a letter Thursday to the Federal Trade Commission and the U.S. Department of Justice Antitrust Division over “concerning reports” that DraftKings and FanDuel have been working in concert to stymie rivals.
This allegedly includes the gambling platforms working individually and through their trade association — the Sports Betting Alliance — to pressure critical business partners such as sports leagues, marketing partners and payment processors to not work with new entrants in the space.
“Such coordinated attacks risk cutting off these new, innovative competitors from critical technology inputs and marketing partnerships,” the letter said. “Even modest obstruction in these negotiations can delay entry and expansion, and potentially deprive the new entrants of access to the capital needed to vigorously compete with the larger players, FanDuel and DraftKings.”
The letter noted that the FTC and enforcers from California and Washington, D.C., sued to block a planned merger between DraftKings and FanDuel in 2016, after finding it would give the combined outfit control over 90% of the market for daily fantasy sports. The companies abandoned the deal the next year in the face of continued scrutiny by enforcers.
Since then, the letter said, DraftKings and FanDuel have leveraged their dominance in fantasy sports to become major players in online sports betting and appear to be engaging in anti-competitive conduct to ward off a number of innovative new companies that are challenging their power.
“FanDuel and DraftKings were prevented from merging because it would have substantially lessened competition and harmed consumers by forming a monopoly,” the letter said. “They should not be allowed to accomplish through collusion what was prevented through acquisition.”
A representative for FanDuel declined to comment Friday.
A representative for DraftKings did not immediately respond to a request for comment Friday.
Story Written by Matthew Perlman & Janice Carter Brown, Law360