Senators from both sides of the aisle have raised alarms over possible antitrust violations by leading online sports betting platforms.

A bipartisan pair of senators has urged federal agencies to scrutinize FanDuel and DraftKings for potentially undermining competition in the sports betting sector, as the Washington Examiner reports.

Earlier this week, Sens. Mike Lee (R-UT) and Peter Welch (D-VT) took a definitive step by addressing a joint letter to the Justice Department and the Federal Trade Commission.

They voiced concerns about these companies' adherence to the Sherman Act, which governs competition law in the United States.

Background of FanDuel and DraftKings' Market Actions

In 2016, FanDuel and DraftKings proposed a merger which was seen as a monumental shift in the online betting landscape. However, this proposal was met with strong resistance from regulatory bodies.

The Federal Trade Commission, along with attorneys general from Washington, D.C., and California, filed a lawsuit in 2017 to prevent the merger. They argued that the merger would create a monopoly controlling more than 90% of the market for daily fantasy sports.

Consequently, the merger was abandoned, leaving both companies to independently dominate the market.

Concerns Over Market Competition

Despite the blocked merger, the Senators' letter indicates ongoing concerns. Lee and Welch allege that both FanDuel and DraftKings have engaged in practices that might prevent new competitors from entering the market.

This includes pressuring business partners to avoid collaborations with potential new entrants in the sports betting arena.

The expansion of their market dominance was further bolstered by leveraging their established positions in the fantasy sports domain to penetrate deeper into online sports betting.

Senators Weigh in on Matter

Lee stressed the importance of fair competition, especially given the increasing societal impacts of online gambling.

He stated, “We can’t allow online gambling companies like FanDuel & DraftKings to violate antitrust laws, especially as more Americans grapple with the effects of this industry on our society.”

Echoing his concerns, Welch highlighted the risks to consumers, emphasizing the importance of strict antitrust enforcement in a high-risk industry like sports betting.

He remarked, “@SenMikeLee and I are calling on the @FTC to enforce antitrust law -- which is especially important to protect consumers in an industry with a higher risk of addiction.”

Broad Congressional Scrutiny on Betting Industries

The action taken by Lee and Welch is not isolated but part of a broader investigation into the sports betting industry.

This sector has seen a significant rise in popularity, raising concerns at the congressional level.

The investigation aims to ensure that the market remains competitive and fair, preventing monopolistic behaviors that could harm consumers.

This increased scrutiny comes at a time when the implications of betting have become a topic of public and political debate, reflecting the need for stringent regulatory oversight.