The Federal Trade Commission announced they will block the expected merger of DraftKings and FanDuel, the two largest daily fantasy sports sites in America.
The FTC argues that the merger would essentially create a monopoly, where both companies would control over 90% of the 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. “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.”
The companies sent emails to its users expressing their disappointment with the FTC’s actions.
“We are disappointed by this approach and continue to believe that a merger is in the best interests of our players and the fantasy sports industry. The FTC’s position on our merger is far from being the final word and we are considering all our options, including litigation,” DraftKings’ release read.
Daily fantasy sports is a topic mired in legal ambiguity. A number of states have outlawed the practice as a form of gambling. While the legality of the situation is sorted through, other sports entertainment companies like ESPN and Yahoo are waiting for a ruling before going all in on the daily fantasy sports market.