FTC Says It Will Move To Block Proposed DraftKings-FanDuel Merger
The FTC, along with attorneys general in California and DC, said it will take legal action to block the proposed merger of daily fantasy sports companies FanDuel and DraftKings. The commission said the merger would put more than 90% of the DFS market in the hands of the combined entity, creating what it called a “near monopoly,” and that the “purposed efficiencies would not offset the likely competitive harm.” A complaint to be filed in federal district court will seek a preliminary injunction against the merger, representing a serious blow against the two money-losing companies which have been beset with a series of legal and legislative issues.
“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said Tad Lipsky, the acting Dir in the FTC’s Bureau of Competition. The companies said they “continue to believe a merger is in the best interests of our players, our companies, our employees, and the fantasy sports industry.” A DraftKings letter to its users went further, saying, “the FTC’s position on our merger is far from being the last word and we are considering all our options, including litigation.”
The move to the courts all but guarantees there be no closure on the matter in time for the start of football season, as the companies had previously hoped. The companies originally announced their intent to merge last November following a lengthy negotiation.