US Senators Want DraftKings And FanDuel Investigated For Alleged Antitrust Violations
Senators Mike Lee and Peter Welch accuse the two operators of conspiring to control the U.S. sports betting market
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Two U.S. senators have formally requested that the Federal Trade Commission (FTC) and the Department of Justice (DOJ) investigate the online sports betting platforms DraftKings and FanDuel.
In a letter dated Dec. 5, Republican Sen. Mike Lee and Democratic Sen. Peter Welch raised concerns about the companies allegedly coordinating efforts to suppress competition in the industry.
The senators cited public reports suggesting that DraftKings and FanDuel may have engaged in joint activities to pressure other businesses not to work with rival betting platforms. Both companies are members of the Sports Betting Alliance, which the senators claim has been used as a vehicle for these actions.
“After their merger to monopoly was blocked, it seems that FanDuel and DraftKings have arguably acted as one company, violating our antitrust laws,” wrote the senators.
DraftKings and FanDuel have grown significantly since the FTC blocked their proposed merger in 2017, which would have given the combined entity control over 90% of the daily fantasy sports market. Since then, both companies have expanded into regulated sports betting, becoming dominant players in this burgeoning industry.
The letter from Lee and Welch, addressed to FTC Chair Lina Khan and Assistant Attorney General for Antitrust Jonathan Kanter, alleges that the companies have acted in concert to limit access to the market for smaller competitors. It accuses them of using their influence with major U.S. sports leagues, commercial partners, payment processors, and vendors to discourage cooperation with other sportsbooks.
These coordinated efforts, the senators claim, have made it increasingly difficult for smaller platforms to compete effectively.
Broader implications for the industry
The senators emphasized that the alleged practices may have far-reaching implications for the competitiveness of the sports betting market. They argue that these tactics create barriers to entry, limit consumer choice, and undermine innovation.
The letter underscores the need for federal scrutiny to ensure that the market operates fairly and in compliance with antitrust regulations.
The investigation request comes at a time when DraftKings and FanDuel are already facing legal challenges.
DraftKings is embroiled in a lawsuit filed by the NFL Players Association over unpaid fees related to the use of NFL players’ likenesses in non-fungible tokens (NFTs). The NFLPA is seeking $65 million in damages.
FanDuel, on the other hand, recently settled a dispute with the MLB Players Association over similar issues concerning the use of player names and images. It also received a $10,000 fine in Massachusetts last week for taking bets on the Boston College men’s basketball team. Massachusetts prohibits college wagers except in tournaments.
While neither DraftKings nor FanDuel has commented on the senators’ request for an investigation, the scrutiny adds to growing pressure on the industry giants. The FTC and DOJ have not publicly responded to the letter, but their potential involvement could signal heightened regulatory oversight in the sports betting sector.
If the FTC and DOJ decide to pursue an investigation, it could have significant implications not only for DraftKings and FanDuel but also for the broader sports betting industry. The outcome may influence how companies engage with competitors, partners, and customers in this competitive market.
