The US Federal Trade Commission said it will seek to stop the merger of DraftKings and FanDuel, because the combined company would control more than 90 % of the U.S. market for paid daily fantasy sports contests.
The FTC, along with the attorneys general of California and the District of Columbia, will file a complaint in federal district court seeking a preliminary injunction to block the deal, the antitrust regulator said.
The companies said in a joint statement that they were considering their legal options. "We are disappointed by this decision and continue to believe that a merger is in the best interests of our players, our companies, our employees and the fantasy sports industry," DraftKings Chief Executive Jason Robins and his FanDuel counterpart, Nigel Eccles, said in the statement.
This is the latest setback for two companies, which have faced regulatory challenges in several states. They announced the deal in November 2016 as a merger of equals that would cut their legal bills.
Between them, the two companies have 95 % of daily fantasy sports, according to data from Eilers and Krejcik Gaming. DraftKings and FanDuel have argued that they compete against larger, more powerful companies in the broader fantasy sports business, like ESPN and Yahoo.
