Senators Urge Investigation into DraftKings and FanDuel for Potential Antitrust Violations

Concerned about possible anti-competitive behavior, two U.S. senators have demanded an investigation into DraftKings and FanDuel. On December 5, Senators Mike Lee and Peter Welch wrote to the Department of Justice (DOJ) and the Federal Trade Commission (FTC) requesting that they look into the online gambling behemoths. The senators claim that the companies may be “coordinating against competitors,” citing claims that they have exerted pressure on enterprises to refrain from partnering with other bookmakers.

Alleged Coordination Raises Antitrust Concerns

The letter from Lee and Welch pointed to actions that could violate antitrust laws. They noted that after their merger attempt was blocked, it appears that FanDuel and DraftKings may have “acted as one company.” The senators expressed concerns about these alleged actions undermining competition within the online betting industry. “After their merger to monopoly was blocked, it seems that FanDuel and DraftKings have arguably acted as one company, violating our antitrust laws,” the letter states. Lee also shared the letter on his social media platforms, bringing attention to the matter.

Beyond the antitrust scrutiny, DraftKings has recently faced penalties from the Securities and Exchange Commission (SEC). The company was fined $200,000 after a controversial post by CEO Jason Robins on X (formerly Twitter) and LinkedIn. The SEC claimed that DraftKings’ PR team shared financial updates from Robins’ personal accounts, which were not deemed official sources of company information. The SEC argued that such updates were selectively shared with specific audiences, raising concerns about transparency.

Aside from these problems, FanDuel has reached a settlement in a pending case concerning the unapproved use of MLB players’ names and photographs on its sports betting website. An MLB Players Association (MLBPA) affiliate brought the lawsuit, which resulted in a voluntary dismissal with prejudice, ending the case without the need for additional legal action.

These changes indicate that DraftKings and FanDuel are under increasing pressure since they are dealing with a number of legal and regulatory issues. These well-known platforms will probably continue to be closely monitored by regulators due to investigations into possible antitrust violations and penalties pertaining to communication and intellectual property issues.