FanDuel and DraftKings rebute the FTC on merger objection

At this time of the year, nobody in the DFS world is talking much about who their WR1 will be in week 1, all the talk is about the anticipated merger of FanDuel and DraftKings and what the merger will really have on how they gamble and what type of service they can anticipate after the merger.    The exact same thoughts have been going through the minds of the FTC, who have temporarily blocked the merger on grounds that the combined market share of the newly formed company would be well above the threshold to be considered a monopoly.   Their reasoning is sound, even people who gamble on Daily Fantasy Sports would be hard pressed to name the company currently in third place in market share and currently, the company in that position controls a market share in the single digits.

The FTC argued that the competition between FanDuel and DraftKings has kept prices low, forced each of the two companies to offer products that they wouldn´t otherwise have offered such as gambling on less popular sports, and has forced both companies to compete against each other by improving their customer service including cash-out times and support services.  Without the competition with each other, the FTC fears that the new mega-company would stop offering gambling options on lesser profitable games and be able to cut back on customer service.

But FanDuels and DraftKings have recently replied to those concerns, stating that the cost savings they anticipate from the merger would not come from eliminating less popular game or from customer support, but instead from advertising costs as well as administrative costs.   They added that the savings from those things could and would be used to provide better customer support to players and allow them even more opportunities to provide more games and services to players.

Their final argument ranges hollow, however, when they tried to argue that while together they dominated the DFS market, that market is not a real market, but should also include the much larger market of fantasy sports overall.  Research and evidence fail to support this claim as most DFS players who bet with real money do not consider season-long fantasy sports as viable alternatives, especially if not for real money.