FANTASY FIGHT CLUB
Duo plots strategy
FanDuel and DraftKings will fight an expected move by Washington regulators to block the merger of the daily fantasy sports sites, The Post has learned.
The companies, which control about 90 percent of the daily fantasy sports market, expect to argue that each loses money and therefore could not be providing its rival with viable competition, a source close to the companies said Monday.
Earlier in the day, the Federal Trade Commission said it intended to sue to block the merger — which was announced last November.
In addition, the California and Washington, DC, attorneys general are expected to join the suit.
Daily fantasy sports players will be harmed by the merger as the combined entity will control 90 cents out of every dollar paid in DFS contests, the FTC said.
“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel [including larger prize pools],” said Tad Lipsky, acting director of the FTC’s Bureau of Competition. “The FTC is committed to the preservation of competitive markets.”
One question sure to be raised in any court battle is whether DFS was a market distinct from season-long fantasy sports.
The merger parties maintain season-long fantasy sports have a much larger player base, perhaps as many as 40 million, and that more companies compete in that genre — including Yahoo Sports, ESPN and CBS Sports, according to a source close to the matter.
DFS has roughly 5 million participants, according to reports.
As such, the market for competition should include season-long fantasy sports, FanDuel and DraftKings could argue, according to the source.
“We are disappointed by this decision and continue to believe that a merger is in the best interests of our players, our companies, our employees and the fantasy sports industry,” DraftKings and FanDuel said in a joint statement. “We are considering all our options at this time.”
In DFS NFL contests, participants cobble together a team from players throughout the league and compete over a single week of actual games — with real statistics determining the DFS winners.
The fantasy teams whose players perform the best win — at times $1 million or more.
This is interim FTC chief Maureen Ohlhausen’s first major block since taking charge in January.
In 2015, the industry came under scrutiny when New York sued the companies. The suit was settled for $12 million, with the companies promising to change the way the games were marketed.