Sens. Say DraftKings, FanDuel May Have Conspired to Crush Competition: ‘One Company’

Two U.S. senators sent a letter to the Federal Trade Commission and Justice Department about concerns that DraftKings and FanDuel are conspiring to maintain a duopoly over the sports gambling and daily fantasy markets.

Senators Mike Lee (R., Utah) and Peter Welch (D., Vt.) penned a letter Thursday to FTC chair Lina Khan and assistant attorney general of the DOJ’s antitrust division Jonathan Kanter, which Lee posted to social media Friday. The letter says it “seems that FanDuel and DraftKings have arguably acted as one company” since the FTC, state of California, and Washington, D.C., sued in 2017 to block their merger attempt, and the companies called it off. The legislators ask the regulators to “undertake any investigative or enforcement actions necessary” to make sure the companies aren’t violating antitrust law outlined in the Sherman Act.

The “one company” allegations stem from a March commentary from Salil Mehra, a law school professor at Temple University. Mehra said FanDuel and DraftKings own more than 90% of the fantasy sports market. He also wrote that recent bans against other daily fantasy companies in several states began with a lobbyist in Wyoming who had ties to the Sports Betting Alliance, a lobbying group that lists FanDuel, DraftKings, BetMGM, and Fanatics Sportsbook as its only four members on its website. Mehra wrote “these two companies now appear to be behaving as an anti-competitive duopoly.”

The letter also referenced other “concerning reports” that the two companies “worked in concert” to “[interfere] with their rivals’ relationships with major sports leagues, marketing partners, payment processing companies, and critical vendors.

“FanDuel and DraftKings were prevented from merging because it would have substantially lessened competition and harmed consumers by forming a monopoly,” the senators said in their letter. “They should not be allowed to accomplish through collusion what was prevented through acquisition.”

A representative from DraftKings did not immediately respond to a request for comment, while a spokesperson for FanDuel said the company has no comment at this time.