DraftKings has sent out an email to its registered players notifying them that the Boston-based daily fantasy sports (DFS) contest provider learned today that the U.S. Federal Trade Commission (FTC) will attempt to block the merger between it and FanDuel.
The email from Paul Liberman, Matthew Kalish, and Jason Robins, who together founded DraftKings in 2011, goes on to state: “We are disappointed by this approach and continue to believe that a merger is in the best interests of our players and the fantasy sports industry. The FTC’s position on our merger is far from being the final word and we are considering all our options, including litigation.”
The FTC suit strikes a major blow to the two companies that dominate the daily fantasy market.
In November of last year, FanDuel and DraftKings confirmed that they had entered into a merger agreement in an effort to alleviate their shared business and regulatory problems. Since the announcement, they have continued to operate as separate entities while awaiting approval from regulators. They planned to offer services under their own brands until the 2017 NFL season is over.
The proposed merger between the two companies, which already reign as the top two DFS websites in the US, would, according to the press release, “control more than 90 percent of the U.S. market for paid daily fantasy sports contests.”
Joining the action by the FTC were the offices of the attorneys general in the District of Columbia and in California.
According to Gaming & Sports Law Attorney, Daniel Wallach, who was cited by Legal Sports Report, what happens next is; in its attempt to stop the merger, the FTC will seek a temporary restraining order and a preliminary injunction in federal court, with an Administrative trial to begin on November 21, 2017.
It remains to be seen if the courts share the FTC’s belief that the proposed merger of DraftKings and FanDuel violates anti-trust law.