And it is! But most providers of fantasy software don’t offer betting. DraftKings and FanDuel was, I thought, just the latest example.īut daily fantasy sports betting has been a target of regulators for years based on its characterization that fantasy football is a “game of skill.” The companies had hoped to argue that the merger does not create a monopoly because the market for fantasy sports is huge. They start out with dozens of competitors but eventually consolidate down to two, and then, after an intense rivalry, they merge. Who didn’t expect these two companies to eventually merge? That’s just what happens with new, novel markets. Why, though? The antitrust scrutiny feels unusual to me.(Remember, each company was fined $6 million for false advertising from the New York attorney general last October.) The companies argued that, separately, they were doubling the resources spent on legal battles - and yes, on advertising against one another – and that ultimately increases cost, which get passed onto consumers. This deal was supposed to reduce the amount of resources the companies were spending on regulatory issues. I asked sources close to both companies if there was anything more to this beyond the regulatory challenges, and they all said the same thing: Nobody wanted another drawn-out, distracting, expensive legal battle that they could easily wind up losing.

In June, the FTC said it would try to stop the deal on antitrust concerns, noting that a combined DraftKings and FanDuel would own 90% of the U.S.

What happened? This deal was supposed to be a slam dunk, to shamelessly use a metaphor from a different sport.

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