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Senators Urge Antitrust Probe Into FanDuel and DraftKings

By  |  December 8, 2024
DraftKings

Sens. Mike Lee (R-Utah) and Peter Welch (D-Vt.) have called for federal authorities to investigate potential antitrust violations by sports betting giants FanDuel and DraftKings. In a joint letter sent Friday to the Federal Trade Commission (FTC) and the Department of Justice, the lawmakers accused the two companies of collaborating to stifle competition in the online sports betting industry.

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    The concerns stem from actions following a 2016 attempt by FanDuel and DraftKings to merge. The merger plan was abandoned after the FTC blocked the transaction, warning that it would have created a combined entity controlling 90 percent of the market. Public backlash also contributed to the decision to scrap the merger. However, according to The Hill, the senators argue that the companies have since leveraged their dominance in fantasy sports to cement their position as leading players in online sports betting.

    “FanDuel and DraftKings may be compounding these harms through anticompetitive conduct,” Lee and Welch stated in their letter. They alleged that the two companies have collaborated to pressure smaller competitors, particularly through the Sports Betting Alliance trade association. The senators accused the companies of intimidating rivals and undermining their relationships with key stakeholders, including sports leagues and vendors, in a way that obstructs fair competition.

    The letter further contended that such tactics could block new competitors from accessing essential technology and marketing opportunities, harming innovation in the industry. “Such coordinated attacks risk cutting off these new, innovative competitors from critical technology inputs and marketing partnerships,” the lawmakers wrote.

    FanDuel declined to comment on the allegations, while DraftKings has yet to issue a statement, according to The Hill. Meanwhile, the Justice Department confirmed receipt of the letter but offered no comment on its contents. The FTC did not immediately respond to inquiries about the matter.

    The issue has sparked broader discussion, with Sen. Lee sharing his concerns on the social media platform X. “We can’t allow online gambling companies like @FanDuel & @DraftKings to violate antitrust laws, especially as more Americans grapple with the effects of this industry on our society,” he posted alongside screenshots of the letter.

    The release of the letter had an immediate financial impact, as DraftKings’ stock saw a decline following the news, Yahoo Finance reported.

    Source: The Hill