The FTC will join with the attorneys general of California and the District of Colombia in filing a federal suit to halt the merger. If the merger were allowed to go forward, the company would control more than 90% of the U.S. daily fantasy market, the government alleges.
“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” Tad Lipsky, acting director of the FTC’s Bureau of Competition, said 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.”
FanDuel and DraftKings issued a joint statement saying they are still working to “determine our next steps.”
“We are disappointed by this decision and continue to believe that a merger is in the best interests of our players, our companies, our employees and the fantasy sports industry,” the CEO’s of both companies said. “We are considering all our options at this time.”
The daily fantasy market has boomed in the last couple of years, but still faces regulatory uncertainty in many states. A recent forecast warned that if the merger were blocked, one or both of the companies could fail.