DraftKings/FanDuel Merger Blocked by Federal Trade Commission


A few months ago, it was announced that the top two daily fantasy sports operators, FanDuel and DraftKings, were preparing to merge. It now seems that the two companies merging efforts are being blocked by the Federal Trade Commission due to the fact that the merger would give over 90% of the paid DFS contests market to the combined firm within the United States.

The Offices of the Attorneys General in California along with the District of Columbia are working with the FTC in filing a complaint within the federal district court to seek a preliminary injunction to stop the merger from taking place. The goal is to maintain status quo until an administrative trial can take place.

Jason Robins is the Chief Executive of DraftKings who provided a joint statement on the filing with FanDuel’s Chief Executive Nigel Eccles, which stated that the companies are disappointed by the decision and continue to believe that a merger of the two companies will be in the best interest of the players as well as FanDuel and DraftKings, employees and the fantasy sports industry.

The complaint by the FTC states that FanDuel and DraftKings are each other’s competitor, with both currently going head to head to offer the best product quality and pricing, including contest variety and large prize pools. With the merger, one single provider would be created that holds the largest share of the market, which would essentially do away with competition within the industry.

The FTC’s Bureau of Competition Acting Director Tad Lipsky commented on the merger by stating that it would deprive consumers of the substantial benefits of direct competition between the two companies. According to Lipsky, the FTC remains committed to preserving competitive markets that offer consumers the best opportunity to have access to innovative products and services with favorable prices and terms that are consistent with the provision of competition returns to efficient producers.


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