DraftKings FanDuel Merger Could be in Trouble

FTC looks at DraftKings FanDuel Merger

Late last year, DraftKings and FanDuel announced their intentions to merge by the end of 2017. According to a new report from Recode, the merger may hit a roadblock.

There are now concerns that the Federal Trade Commission may try to stop the merger from proceeding.

If combined, the top two daily fantasy sports sites would represent nearly 80% of the daily fantasy sports traffic in the United States. And the FTC could see that as a problem. According to the report, some at the FTC may have recommended to stop the merger, however the matter would still be on the FTC commissioners to vote, which could happen as soon as next week. Recode notes that blocking the merger could prove challenging as the FTC only has two members and if they split their vote, the merger would go on.

If the commissioners followed a recommendation to block the merger, attorneys of the FTC would file a federal lawsuit to try to stop the merger. From there, DraftKings and FanDuel could have a few different options. They could drop the merger, fight the matter in court or try to reach a settlement with the FTC.

Would the DraftKings FanDuel Merger be a Monopoly?

While a united DraftKings and FanDuel would certainly dominate the daily fantasy sports space, some argue that DraftKings and FanDuel doesn’t exclusively compete with other DFS sites. They also compete with traditional season-long fantasy sports platforms popularized by ESPN and Yahoo, which currently represent a much larger percentage of overall fantasy sports participatnts.

FanDuel and DraftKings will certainly be hoping that the review sees it that way rather than a focus specific on daily fantasy sports. Daniel Wallach, who is a lawyer that works on gaming and sports law matters agrees. “From DraftKings and FanDuel’s perspective, the broader the marketplace, the better it [looks] for their proposed combination, The more persuasively they can make that case, the more likely they [are to] survive antitrust scrutiny.”