U.S. Senators Mike Lee and Peter Welch have written to the Federal Trade Commission (FTC) asking that it look into the business practices of FanDuel and DraftKings.
The letter urges the agency to investigate whether FanDuel and DraftKings are leveraging their dominant positions to stifle competition in the U.S. sports betting and DFS markets.
In a tweet on December 9th, 2024, Senator Lee stated:
“Healthy competition benefits consumers. FanDuel and DraftKings should be investigated for practices that could harm the sports betting industry and limit choices for users.”
The bipartisan concerns highlight the increasing scrutiny on the business practices of the industry’s biggest operators, whose market dominance has drawn criticism from regulators, competitors, and lawmakers alike.
This letter reflects growing apprehensions that the companies’ control over key aspects of the industry may harm smaller operators and inhibit market innovation. Concerns center on the possibility of exclusionary tactics and coordinated efforts to dominate state-level licensing processes and customer acquisition strategies.
What the Critics Say
Critics argue that FanDuel and DraftKings, who together command a majority market share in both DFS and legalized sports betting, are using their dominance to undercut competitors.
Allegations include offering promotions that are financially unsustainable for smaller operators and influencing legislative processes to shape market regulations in their favor. Such behavior, if proven, would contravene the Sherman Antitrust Act, which prohibits monopolistic practices.
For example, smaller operators claim that the companies’ extensive marketing budgets and exclusive partnerships with professional sports leagues create an uneven playing field. In some states, these partnerships have led to what detractors describe as a “duopoly,” effectively sidelining other industry players.
FanDuel and DraftKings Respond
Both FanDuel and DraftKings have denied any wrongdoing, stating that their practices comply with all applicable laws and that their success stems from innovation and consumer trust. In separate statements, they emphasized their role in expanding access to legal and regulated betting options across the U.S.
A spokesperson for DraftKings noted:
“Our focus remains on delivering a superior product for our customers while adhering to all regulatory requirements. We welcome any opportunity to clarify our practices and demonstrate our commitment to a fair and competitive marketplace.”
Similarly, FanDuel underscored its contributions to the industry, citing significant investments in customer education, responsible gaming initiatives, and community partnerships.
The investigation comes as the U.S. sports betting market is expected to surpass $30 billion in revenue by 2025.
An experienced iGaming commentator and analyst based in New York City - Jenny reports on regulation and gambling industry news and events.