U.S Federal Trade Commission May Derail Draftkings and FanDuel Merger
The much talked about merger between DFS arch rivals DraftKings and FanDuel could see a monopoly dominated by the new joint company in an industry that has seen much turmoil in the last few years. The upheaval and instability in the DFS sector has been covered extensively by our team.
The fact that these two hated each other not so long ago and often took public jabs against each other makes the proposed merger even more intriguing. After being scrutinized and challenged legally in many states, the two DFS powerhouses came to the realization that the best way forward both financially and practically would be to create a united front and single product that would help them return to their glory days where each company was valued at over $1 billion.
The proposed merger is far from sealed and could be derailed as staff at the U.S. Federal Trade Commission have raised serious concerns which could lead to the government body blocking the deal.
The FTC is very wary of the fact that should the merger go ahead FanDuel and DraftKings could control over 80 percent of the market.
As it stands the recommendation to stop the deal is only that and in order for it to become a reality the agency’s sitting commissioners have to vote on the matter. Another reason why it will likely fail is that the 5 member FTC team has one Republican chairman and one Democratic Commissioner. If they do not agree and split their vote, the deadlock will pave the way for the merger to go ahead as planned. All parties including the FTC, DraftKings and FanDuel refused to comment and it remains to be seen what will transpire.