The planned merger between DraftKings and FanDuel has encountered a significant roadblock in the form of regulation from the Federal Trade Commission.
The two major players in the fantasy sports world announced plans to merge last November, but now the FTC has issued a press release stating it intends to challenge the merger in hopes of preventing what it says could be a near-monopoly on the fantasy sports business.
Currently, DraftKings is the largest fantasy sports service operating in the United States, with FanDuel coming in as the second largest.
While FanDuel shut down its own short-lived fantasy eSports service after just a year, DraftKings still notably provides a platform from those wanting to build and wager on the performance of major eSports competitors.
If the merger between the two companies were to go through, the FTC points out that the resulting firm would control over 90 percent of the fantasy sports industry.
“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said FTC Bureau of Competition acting director Tad Lipsky 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.”
As such, the FTC has filed a joint complaint with both the California and Washington D.C. Attorney General Offices seeking to block the merger. The resulting administrative trial is set to begin on November 21, 2017.