Economy

Judge temporarily halts daily fantasy sports merger

Judge temporarily halts daily fantasy sports merger”

The federal court complaint alleges that paid daily fantasy sports contests in the United States represent a distinct antitrust product market.

Tad Lipsky, acting director of the FTC's Bureau of Competition, said in a statement: "This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel". However, the commission said that other fantasy sports contests involving competitions over an entire professional season are not likely to be "a meaningful substitute for paid daily fantasy sports".

The FTC is planning to file a legal complaint against the planned merger of online fantasy sports sites FanDuel and DraftKings, saying that it would eliminate competition in the market space. DraftKings CEO Jason Robbins will be the CEO of the new company and FanDuel CEO Nigel Eccles will be Chairman of the Board. The complaint alleges they are each other's closest and most significant competitor and they have battled head-to-head to offer best prices, product quality, largest prize pool and greatest variety of contests.

"It all comes down to how you define the relevant market, and that's where they fell short", Daniel Wallach, a Florida attorney who specializes in gambling and sports law, said of the two companies.

In his own press release, Washington, D.C. Attorney General Karl Racine said, "Daily fantasy sports contests are a pastime that many District residents enjoy - but it's no fun for consumers when near-monopolies limit competition and innovation".

Boston-based DraftKings and New York-based FanDuel agreed to merge in November as the industry they helped pioneer fell under intense regulatory scrutiny.

The FTC voted 2-0 to authorize its staff to seek a temporary restraining order and preliminary injunction in federal court.

Federal and state officials have moved to block the fantasy sports merger between DraftKings Inc. and FanDuel.

Daily fantasy sports, a turbocharged version of the season-long game, have developed over the past decade into a multibillion dollar industry. That's left DraftKings and FanDuel as the largest remaining operators.

DraftKings, which was founded in 2012, is now the largest in terms of entry fees and revenues. FanDuel of Scotland is not far behind at No. 2.



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