In 2017, the Federal Trade Commission and two state attorneys general took legal action to stop the merger of FanDuel and DraftKings, two corporate behemoths in the fantasy sports market. The FTC argued that the proposed merger would give one company control of nearly 95% of the market. "This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel," said Tad Lipsky, then the acting director of the FTC's Bureau of Competition. At the end of the day, the FTC's opposition stopped the merger in its tracks, but recent actions by the two companies raise questions as to whether the FTC should take another look at marketplace concentration—and its implications—in the fantasy sports industry.

Fantasy Sports—From the Shadows to a $50 Billion Industry

During the early 2000s, Americans became enamored with online poker, which at the time was of questionable legality. The so-called "poker boom" years saw the number of people playing online poker double every year. The boom came crashing down when Congress, in 2006, enacted the Unlawful Internet Gambling Enforcement Act (UIGEA). Rather than criminalize online players, the legislation prohibited "any person engaged in the business of betting, as defined, from knowingly accepting credit, electronic fund transfers, checks, or any other payment involving a financial institution to settle unlawful internet gambling debts." While the legislation decimated online poker, it also unleashed the fantasy sports industry.

The ULGEA creates a carve-out for "fantasy sports games," exempting fantasy sports contests from this law as long as they meet the following criteria: