BOSTON Federal regulators are challenging the planned merger of FanDuel and DraftKings, saying the combination of the two largest daily fantasy sports sites would create a company controlling more than 90 percent of the market.
As such, the FTC has filed a joint complaint with both the California and Washington D.C. Attorney General Offices seeking to block the merger. If the merger were allowed to go forward, the company would control more than 90% of the US daily fantasy market, the government alleges.
Edinburgh, Scotland-based FanDuel, founded in 2009, is the second-largest daily fantasy sports provider in the US and offers contests in football, baseball, basketball, hockey, soccer and golf.
Founded in 2012, Boston-based DraftKings is the largest daily fantasy sports company in the USA, based on entry fees and revenues, according to the FTC.
The two daily fantasy sports sites, once bitter rivals, began pursuing a tie-up last November, particularly as regulatory pressures - from an investigation and shutdown in NY to political scrutiny by the U.S. Congress - continued to mount.
"By combining and streamlining resources, FanDuel and DraftKings can work more efficiently with state government officials to develop a standard regulatory framework for the industry", they said in a November statement.
"This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel", said Tad Lipsky, Acting Director of the FTC's Bureau of Competition.
A DraftKings email sent to all employees today obtained by Legal Sports Report painted a picture of what's going on inside at least one of the DFS companies.
In an internal memo to employees, DraftKings co-founder and chief operating officer Paul Liberman said the company intends to ask a federal court to issue an injunction against the FTC's action.
Welcome to the Monday Day FanDuel MLB edition of Picks and Pivots, a fantasy baseball column focused on helping you find the best core lineup for today's Main slate which kicks off at 7:05 PM EST! That's left DraftKings and FanDuel as the largest remaining operators. The complaint also asserts that purported efficiencies would not offset the likely competitive harm.
The trial would commence on November 21, according to the FTC.