DraftKings and FanDuel face bipartisan scrutiny over potential antitrust violations, as Senators Mike Lee (R-UT) and Peter Welch (D-VT) raise concerns about their market dominance and alleged anticompetitive practices.

The senators have written to Assistant Attorney General Jonathan Kanter and FTC Chairwoman Lina Khan, alleging that since their blocked 2016 merger attempt, the two companies have operated in ways that may violate antitrust laws.

Currently controlling over 70% of U.S. mobile sports betting market share, DraftKings and FanDuel successfully leveraged their daily fantasy sports (DFS) presence to dominate the legal sports betting landscape following the 2018 PASPA ruling.

Key concerns raised by the senators include:

• Possible coordinated efforts to pressure business partners against working with competitors
• Potential interference with competitors' access to sports leagues and vendors
• Using the Sports Betting Alliance to suppress competition
• Maintaining duopoly-like market conditions across most states

The market reacted to this news with DraftKings shares falling 1.29% while Flutter Entertainment (FanDuel's parent company) managed to close with a slight gain despite earlier volatility.

The investigation's future remains uncertain as the upcoming administration change may bring new leadership to both the FTC and Justice Department, potentially affecting any regulatory response to these allegations.

Currently, sports betting is legal in 39 states and Washington, DC, with DraftKings and FanDuel consistently ranking first and second by market share in nearly all jurisdictions where they operate.

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