US Senators Urge Antitrust Probe into DraftKings and FanDuel
Two US senators have formally requested a joint investigation by the Federal Trade Commission (FTC) and the Department of Justice into DraftKings and FanDuel's business practices.
Senators Lee and Welch alleged that FanDuel and DraftKings breached antitrust laws.
LISTEN TO THIS ARTICLE:According to Reuters, Senators Mike Lee and Peter Welch wrote to the departments on December 5, expressing concerns that DraftKings and FanDuel are coordinating anticompetitive efforts against other operators.
In their letter, senators Lee and Welch alleged that despite rejecting their proposed merger, FanDuel and DraftKings have continued to "act as one company, " violating antitrust laws.
DraftKings and FanDuel’s Rise
Since the US Supreme Court repealed PASPA in 2018 and states started launching regulated sports betting markets, DraftKings and FanDuel have solidified their presence as dominant players in the industry.
In various states where they are present, the two operators usually command a substantial share of the sports betting market, with one typically ranking first or second in handle and revenue. For instance, in the newly released New York November gambling figures, FanDuel led the market with a handle of $921.2 million and $102.6 million in GGR. DraftKings came second with $745.4 million in wagers and a GGR of $77.1 million.
The two operators have maintained their market hegemony through various business strategies like acquisitions and mergers, partnerships, innovation, and retail expansion.
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Market Leaders Under Scrutiny
However, their success has not been devoid of regulatory challenges. For instance, DraftKings was fined $200,000 by the Securities and Exchange Commission (SEC) for its CEO's unauthorized social media post on X and LinkedIn.
The SEC alleged that DraftKings' public relations team shared a financial update on CEO Jason Robins' personal X and LinkedIn account, which it considers an "unofficial source" for disseminating such information.
Last month, DraftKings was also fined $425,000 by the Ohio Casino Control Commission for two compliance violations related to sports betting operations in the state.
In October, a man from New Jersey, Michael Wadlow, filed a lawsuit against FanDuel for failing to pay out his parlay winnings after he voluntarily opted out of further gambling.
RELATED TOPICS: Regulation
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