Games companies battling regulator

FanDuel in fight to keep merger on track

Nigel Eccles, CEO of Fanduel (photo by Terry Murden)

Daily fantasy sports companies DraftKings and FanDuel insist their planned merger remains on track after saying the deal would not force up the cost of playing.

The Federal Trade Commission in the US filed a lawsuit last month aimed at derailing the merger which would create a company controlling more than 90% of the domesitc market for paid daily fantasy sports contests.

In their own filings, the companies argue that the FTC’s view reflected “an unnecessarily rigid and uninformed application of the antitrust laws to an underdeveloped, nascent industry, and largely ignore rigorous economic analysis that has revealed consistently, no matter which way it is analysed, that prices are not likely to increase as a result of the transaction.”

The companies says they compete for players against larger, more powerful companies such as ESPN and Yahoo which dominate the broader fantasy sports business.

The FTC presents formidable opposition to the deal. It has asked for a preliminary injunction to prevent the companies from closing the deal while it conducts an internal review to determine if the merger is legal.

In past cases, where the FTC has secured an injunction companies have given up because deals cannot be held together during the lengthy internal process.

FanDuel founders Nigel and Lesley Eccles moved permanently from the UK to the US to oversee the merger which they hope will cut their costs, including legal bills that have mounted as the companies have fought state banning orders on their games.

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