Two U.S. senators have formally called on the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to investigate whether the leading sports betting companies, DraftKings and FanDuel, have engaged in antitrust violations. The request, which has garnered bipartisan support, comes amid concerns that the two companies might be coordinating to suppress competition in the sports betting market.
Concerns Over Market Dominance
Senators Mike Lee (Republican) and Peter Welch (Democrat) have raised alarms based on reports suggesting that DraftKings and FanDuel could be “acting together” to pressure other businesses and prevent them from partnering with competing sportsbooks. This is particularly troubling because DraftKings and FanDuel have long dominated the U.S. sports betting landscape, controlling most of the regulated market and maintaining significant market share across the country.
The issue is further complicated by the history between the two companies. In 2016, DraftKings and FanDuel attempted to merge, aiming to create a dominant player in the market. However, their merger was blocked by antitrust regulators, who were concerned about the lack of competition in the industry if the deal went through.
Potential Antitrust Violations
The senators’ petition draws attention to concerns that the companies’ past collaboration could still be influencing their business practices. Senator Lee has expressed concerns that their activities could already be violating U.S. antitrust laws, potentially by sharing strategies or coordinating efforts to stifle competition.
While DraftKings CEO Jason Robins has suggested that smaller companies can still survive in the market, he acknowledges the financial challenges facing many smaller sportsbooks. Several operators, including PointsBet, MaximBet, Super Group’s Betay, and Kindred’s Unibet, have already scaled back their U.S. operations, citing difficulties in competing with the market giants.
This ongoing scrutiny highlights the growing concern over the concentration of power in the sports betting market, and regulators may soon examine whether the current market structure allows for fair competition or if action is needed to preserve a competitive environment.
