DraftKings and FanDuel Face Antitrust Scrutiny from Senate Over Market Dominance
DraftKings and FanDuel are facing bipartisan scrutiny over potential antitrust violations in the U.S. sports betting market. Senators Mike Lee (R-UT) and Peter Welch (D-VT) have raised concerns about alleged anticompetitive behavior between the two betting giants.
NFL players during game action
The senators have addressed these concerns in a letter to Assistant Attorney General Jonathan Kanter and FTC Chairwoman Lina Khan, highlighting several key issues:
Current Market Dominance:
- The two companies control over 70% of U.S. mobile sports wagers
- They consistently rank first and second in market share across most states
- Their dominance stems from their earlier success in daily fantasy sports (DFS)
Alleged Anticompetitive Practices:
- Coordinated efforts to pressure business partners against working with competitors
- Interference with competitors' relationships with sports leagues and vendors
- Possible market access obstruction through the Sports Betting Alliance
Market Context:
- Their attempted 2016 merger was blocked by regulators
- Sports betting is now legal in 39 states plus Washington, DC
- This expansion followed the 2018 Supreme Court PASPA ruling
Financial Impact: The news has affected both companies' stock performance:
- DraftKings (NASDAQ: DKNG) closed down 1.29%
- Flutter Entertainment (NYSE: FLUT), FanDuel's parent company, ended slightly up after initial decline
The investigation's future remains uncertain with the upcoming administration change, as new leadership at the FTC and Justice Department may have different priorities regarding the senators' concerns.