Staff at the US Federal Trade Commission have raised serious competition concerns with the proposed merger of FanDuel and DraftKings, according to three sources familiar with the matter, raising the specter that the government agency could soon block the deal.
As originally proposed, the combination would grant FanDuel and DraftKings — which rank as the top-two daily fantasy sports websites in the United States — perhaps more than 80 percent of that particular market. That’s a significant foothold in the industry, and it’s weighed heavily on some legal staff at the FTC, which began its customary antitrust review of the merger shortly after it was announced in November 2016.
For now, a recommendation by some at the FTC to sue to stop the deal is only an initial step in the process: It would still fall to the agency’s sitting commissioners to vote on the matter, which could happen this week.
This time, however, a legal challenge could prove especially tough to bring. At the moment, the five-member FTC only has one Republican chairman and one Democratic commissioner, and if they split in their vote, the deadlock would allow the FanDuel-DraftKings deal to proceed unimpeded.
When asked about the merger, a spokeswoman for the FTC declined to comment. Spokeswomen for both FanDuel and DraftKings also declined to comment on Wednesday.
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