The Federal Trade Commission (FTC) is preparing to block a merger between DraftKings and FanDuel.
The FTC says that it will file a suit in order to stop the merger. It points out that DraftKings and FanDuel make up 90% of the daily fantasy sports business. This would result in a merger creating an illegal monopoly. The organization claims that this will deny customers the benefits of competition between the two companies.
“We are disappointed by this decision and continue to believe that a merger is in the best interest of our players, our companies, our employees and the fantasy sports industry,”DraftKings CEO Jason Robins and FanDuel CEO Nigel Eccles, told ESPN in a joint statement. “We are considering all our options at this time.”
DraftKings and FanDuel got together after spending a hefty sum on advertising and agreed to merge in November. However, the move from the FTC, as well as California and Washington D.C., will likely put an end to these plans. The organization notes that a trial to stop the merger will begin on Nov. 21.
DraftKings and FanDuel are planning to appeal the FTC’s decision on the matter. Thee two organizations are planning to present evidence to show that they aren’t competing in a viable market. This will likely be done by showing that they are both losing money by competing against one another.
The FTC’s decision to file a suit to stop the merger is one of the first major actions made by interim Chief Maureen Ohlhausen. Ohlhausen is hoping to takeover the role permanently, but some sources say that his decision to stop the merger may not be received well by the current White House administration, New York Post notes.
As of this writing, William White did not hold a position in any of the aforementioned securities.
