Senators Demand Antitrust Investigation into FanDuel and DraftKings

Two US senators, Mike Lee (R-Utah) and Peter Welch (D-Vt.), have asked federal regulators to look into possible antitrust rule-breaking by top online sports betting sites FanDuel and DraftKings. 

Lawmakers Urge FTC and DOJ to Investigate Potential Collusion Between FanDuel and DraftKings

The lawmakers sent a letter on December 5 to the Federal Trade Commission (FTC) and the Department of Justice (DOJ). They expressed concerns about claimed team-ups between the two companies to block rivals in the online sports betting market.

The senators claimed FanDuel and DraftKings took part in practices that limit competition, breaking Section 1 of the Sherman Act, which bans agreements that hold back trade. This follows the FTC and other regulators stopping the companies from joining forces in 2016. They saw the merger as bad for market rivalry, as it would have created a business with 90% of the market. After the merger fell through, the companies used their strong position in fantasy sports to grow into online sports betting making their market control even stronger.

Lee and Welch claimed that FanDuel and DraftKings may be working with their trade group, the Sports Betting Alliance. The senators suspect the two companies have tried to slow down new competitors. These actions include pushing business partners — like sports leagues, marketing affiliates, and payment processors — to cut ties or avoid deals with newer companies. The senators say these moves could stop smaller rivals from getting key resources slowing their entry and growth in the market.

Legislators Highlight Risks of Anti-Competitive Practices in Sports Betting

The senators stressed that these actions hurt competition in the growing sports betting industry, which depends a lot on new tech and partnerships. They pointed out that even small hiccups in talks with vendors or leagues could slow down smaller companies leaving customers with fewer choices in the market.

The DOJ said it got the letter but did not comment further, and the FTC has not answered yet. FanDuel and DraftKings have not made any comments about the claims. Meanwhile, DraftKings’ stock dropped after the letter came out showing the market’s worry about possible government checks.

The senators stressed how important it is to keep competition fair in businesses like online betting, which can lead to bigger problems for society, like addiction. They pushed the FTC and DOJ to take strong action to enforce antitrust laws and to keep the industry fair and open for customers and new companies trying to join.

This demand puts more pressure on both firms, on top of their ongoing court battles and fines from regulators. It is unclear if these claims will spark official probes or penalties.