FTC Sues to Block FanDuel-DraftKings Combo

Commission says season-long contests aren't sufficient governor on merging top two daily sites

The Federal Trade Commission has sued to block the merger of online fantasy sports sites DraftKings and FanDuel.

The FTC, joined by the state of California and Washington, D.C., filed a complaint in federal district court alleging that the combo violated both antitrust laws and the FTC Act. 

“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said Tad Lipsky, acting director of the FTC’s Competition Bureau, 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.”

DraftKings was founded in Boston in 2012 and FanDuel in Scotland in 2009. They are the largest and second largest fantasy sports sites respectively. They are both paid daily contests, which the FTC said means that other season-long contests are not a meaningful substitute or that new daily sites can ramp up fast enough to provide sufficient competition. 

The vote to approve the suit was 2-0, meaning chairman Maureen Ohlhausen, a Republican, and Terrell McSweeny, a Democrat, agreed. 

The suit does not mean there has been any finding of guilt, only that there is a reason to believe the merger violates the law.