Feds Vote to Block Proposed DraftKings, FanDuel Merger
Regulators say the combined company would comprise 90 percent of the market.
Federal regulators voted Monday to block the proposed merger of rivals DraftKings and FanDuel, the country’s two largest daily fantasy sports sites.
Arguing that the resulting company would hold a 90-percent market share, the U.S. Federal Trade Commission will join the attorneys general in California and New York in filing a complaint in administrative court to halt the deal.
“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” Tad Lipsky, acting director of the FTC’s Bureau of Competition, said in a statement. “The FTC is committed to the preservation of competitive markets, which offer consumers the best opportunity to obtain innovative products and services at the most favorable prices and terms consistent with the provision of competitive returns to efficient producers.”
In a statement, DraftKings CEO Jason Robbins said the Boston-based company is “considering all our options at this time.”
“We are disappointed by this decision and continue to believe that a merger is in the best interests of our players, our companies, our employees and the fantasy sports industry,” Robbins said. “As we work together to determine our next steps, we would like to thank DraftKings and FanDuel players, partners and employees for their patience, support, and continued loyalty.”
The FTC will have its chance to prove that the merger of DraftKings and FanDuel would create “anticompetitive effects” when the administrative trial begins November 21.