FanDuel and DraftKings, the giants of online U.S. sports betting, have been accused of collusion and competition busting by two powerful U.S. senators, who have now urged federal authorities to investigate.
In an open letter, also published on social media site X, Senators Mike Lee, Republican, of Utah, and Peter Welch, Democrat, of Vermont, have appealed to the Federal Trade Commission (FTC) and Department of Justice (DOJ) to open an inquiry into how and why FanDuel and DraftKings control some 65 percent of the American iGaming sports wagering and fantasy sports market.
The letter accuses Flutter-owned FanDuel and Massachusetts-origin DraftKings of effectively breaching fair competition laws and violating Section 1 of the fearsome antitrust Sherman Act.
America’s top online sportsbooks have combined to “influence” supplier, software and marketing deals for new market entrants, making an already tough market even tougher and strangling start-ups at birth, the senators allege.
Unethical
iGamingFuture has contacted both FanDuel and DraftKings for comment but has received no response to date.
In 2017 the FTC blocked a proposed merger between the two operators because they said it would have given the combined brands some 90 percent of the Daily Fantasy Sports (DFS) market and violated monopoly rules as set out in the Clayton Act — a 1914 Federal Law that defines unethical business practices, such as price fixing and monopolies.
But since the 2018 repeal of PASPA, online sports betting has exploded across the USA, with FanDuel and DraftKings controlling 65 percent of the market by GGR metrics.
Violating Antitrust Laws
Their joint letter states that DraftKings and FanDuel have used “anti-competitive conduct” by pressuring “crucial business partners not to do business with these new players” rather than competing with these new entrants on merit.
Such “coordinated attacks”–as described in their declaration–are aimed at delaying entry, expansion and potentially depriving the “new entrants of access to the capital needed to vigorously compete with the larger players” and include “interfering with their revivals’ relationship with major sports leagues, marketing partners, payment processing companies and critical vendors”.
Urging the FTC and DOJ to investigate, the letter continues: “FanDuel and DraftKings have arguably acted as one company, violating our antitrust laws.
“Your agencies are charged with protecting competition and consumers from exactly this kind of anti-competitive behaviour.”
America’s uber-competitive sports betting market is marked with a trailing list of failed big-name operators, among them Super Group’s Betway, Kindred’s Unibet, PointsBet, Wynn.bet and even evoke.
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