Federal and state officials yesterday moved to block the merger between DraftKings Inc and FanDuel, arguing the combination would harm competition by locking up 90 per cent of the daily fantasy sports market in the US.
The Federal Trade Commission (FTC) said it would file a suit seeking a court injunction to stop the deal, joined by the attorneys general of California and the District of Columbia.
''This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,'' said Tad Lipsky, acting director of the commission's competition bureau, Los Angeles Times reported.
Boston-based DraftKings, was the largest daily fantasy sports company based on entry fees and revenues, the FTC said. FanDuel of Scotland was No 2.
Customers paid a fee to select a lineup of professional athletes, then competed for daily prizes on the basis of their on-field performance. The FTC said DraftKings and FanDuel competed to offer the best prices, largest prizes and greatest variety of contests.
DraftKings chief executive Jason Robins and FanDuel chief executive Nigel Eccles said they would ''work together 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,'' they said.
Meanwhile, the FTC said in a press release:
The Federal Trade Commission has authorized legal action to block the merger of the two largest daily fantasy sports sites, DraftKings and FanDuel, alleging that the combined firm would control more than 90 per cent of the US market for paid daily fantasy sports contests. The FTC, jointly with the offices of the Attorneys General in the State of California and the District of Columbia, will file a complaint in federal district court seeking a preliminary injunction to stop the deal and to maintain the status quo pending an administrative trial.