Senators Request DOJ Probe into DraftKings, FanDuel

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00:00Interesting senator here on a call with Department of Justice about a potential monopoly or you

00:10know, whatever you want to call it antitrust because of the fact that FanDuel and DraftKings

00:15have such a big part of the market share.

00:17Do they not understand that there are a lot of other places to bet all over the country?

00:21You'll have to explain this one to me.

00:23Yeah, Craig, pretty interesting news happened late on Friday.

00:28Two U.S. Senators, Mike Lee of Utah and Peter Welch of Vermont, one a Republican, one a

00:33Democrat, writing this letter to the Department of Justice and the Federal Trade Commission,

00:39basically asking them to investigate DraftKings and FanDuel for antitrust violations.

00:44The letter cites only one source, a Temple Law article that mentions that DraftKings

00:51and FanDuel have used their lobbying group, the Sports Betting Alliance, to essentially

00:57allegedly coerce their partners into not allowing other competition into the market to use kind

01:05of their relationships, weaponizing that group against other people in the market.

01:10Now, it's really interesting for a number of reasons.

01:13We can start with the fact that whoever is at the Department of Justice right now and

01:18whoever is at the FTC right now, I would say almost 100 percent certainty is not going

01:24to be there in January because a new president is taking over.

01:28Donald Trump is expected to pretty much clean house pretty much any time you go from one

01:34party to another.

01:36They appoint a whole new slew of agencies overseeing these things.

01:40So it's sent to these lame duck, these lame duck groups.

01:44And then to go further than that, the Sports Betting Alliance, which is named in the letter

01:48that says it kind of allegedly has been used as a weapon, they also represent a lot of

01:54competition of DraftKings and FanDuel, notably BetMGM and Fanatics.

01:59So the letter kind of says that DraftKings and FanDuel have been using this group that

02:02also represents some of their competition, pretty kind of eyebrow raising stuff here.

02:08Now, DraftKings and FanDuel, like you mentioned, do have about 77 percent of the market.

02:13Fans have had the freedom to choose whatever sports betting apps they want.

02:17You have had a bunch of new sports betting apps pop up.

02:20Over the last year, even as the market consolidates, you know, Fanatics has a ton of capital.

02:25They bought PointsBet.

02:26They're backed by Michael Rubin, who's a billionaire.

02:29Bet365 is now expanding in the U.S.

02:31They're one of the largest global gaming operators.

02:33So you kind of are wondering what competition specifically are they accusing DraftKings

02:39and FanDuel of kind of working together to go against here.

02:43Now, the letter does mention that the two groups tried to merge in 2016, back before

02:46sports betting was legal beyond Nevada.

02:48But that was blocked by the FTC at the time, saying it would create a monopoly over the

02:52fantasy sports market.

02:54Obviously, DraftKings and FanDuel are much more focused on online sports betting now

02:58than they were back then with fantasy sports.

03:01But going to be interesting to see what comes of this.

03:04There's also a call for a Senate Judiciary Committee hearing next week, which is going

03:09to involve these two senators as well.

03:11So maybe they'll provide some more color there during that commentary.

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