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FTC files to block merger of fantasy sports sites

FTC files to block merger of fantasy sports sites
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The Federal Trade Commission (FTC) said on Monday that it will seek to block an attempted merger between two fantasy sports betting websites, DraftKings and FanDuel.

The FTC said that it has authorized legal action to prevent the merger between the two companies, which are the two biggest platforms in the online sports betting market. 

“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said Tad Lipsky, acting director of the FTC’s Bureau of Competition, arguing that each is the other's most significant competitor. 

The FTC said that the deal between FanDuel and DraftKings would lead to them controlling 80 percent to 90 percent of the market.

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The FTC is also filing a joint complaint with the offices of the attorneys general in California and the District of Columbia, seeking a preliminary injunction to stop the deal prior to an administrative trial.

“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,” DraftKings CEO Jason Robins and FanDuel CEO Nigel Eccles said in a joint statement reacting to the FTC’s decision. “We are considering all our options at this time.”

Both companies have endured significant legal and regulatory hurdles as they’ve rapidly gained market share in the online sports betting space over the last several years.

The companies temporarily had to stop operations in New York state over a debate as to whether or not their platforms were for games of skill, or for games of pure chance. Other states like Texas and Mississippi have banned FanDuel and DraftKings, stating that they violate online gambling laws.