Antitrust Law Daily FTC moves to block merger of fantasy sports websites
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Monday, June 19, 2017

FTC moves to block merger of fantasy sports websites

By Jeffrey May, J.D.

The proposed merger of DraftKings, Inc., and FanDuel Limited is being challenged by the FTC. Concerned that the proposed combination would reduce competition in the U.S. market for paid daily fantasy sports contests, the FTC announced today that it was issuing an administrative complaint, as well as filing a complaint in the federal district court in Washington, D.C. to block the transaction pending an administrative trial (In the Matter of Draft Kings, Inc., FTC Dkt. 9375, File No. 161 0174).

According to the FTC, the combined firm would control more than 90 percent of the U.S. market for paid daily fantasy sports contests. The companies battle head-to-head to offer the best prices and product quality, including the largest prize pools and greatest variety of contests. The proposed merger would create a single provider with by far the largest share of the market for paid daily fantasy sports contests in the United States, it was noted.

"This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel," said Acting FTC Bureau of Competition Director Tad Lipsky in announcing the action. "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," he added.

An administrative trial would begin in November 2017. The FTC, joined by the attorneys general in the State of California and the District of Columbia, have filed a complaint seeking a temporary restraining order and preliminary injunction to stop the deal and to maintain the status quo pending the trial.

Response from merging parties. DraftKings and FanDuel expressed disappointment with the government’s decision to challenge the merger. The companies said that they are considering their next steps.

Companies: DraftKings, Inc.; FanDuel Ltd.

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