In the lead-up to Super Bowl LIX fans were busily restocking their stores of face-paint, sharing recipes, and locking down their daily fantasy sports picks, making a record $1.39 billion in wagers on FanDuel and DraftKings.

Others were trying to predict which songs Pulitzer Prize winning rap star Kendrick Lamar would perform at half-time, using the Kalshi platform, which characterizes itself as a “regulated financial exchange” that positions event contracts as “trading assets,” not “gambling products.” Canadians could place half-time-related wagers on FanDuel.

So, football fanatics were understandably more focused on the Philadelphia Eagles, Kansas City Chiefs, and whether Lamar would diss Drake, than on a letter from a pair of politicians.

But we can be sure the companies are paying attention. Senators Mike Lee (R-Utah) and Peter Welch (D-Vt.) have urged the Federal Trade Commission and the Department of Justice Antitrust Division to investigate potential antitrust violations by FanDuel and DraftKings, the runaway dominant players in the online betting market.

Lee and Welch filed their letter in December in that period after the election but before President Trump’s team took their seats in power. Only time will tell how or whether the new antitrust enforcers will respond. But the letter raises important questions for this burgeoning industry. The senators are concerned that the companies are coordinating their efforts to suppress competition, nine years after the government blocked their merger due to the same antitrust worries.

The senators allege that, despite the failed merger, the companies have continued to leverage their dominance in fantasy sports. They specifically accuse FanDuel and DraftKings of using the Sports Betting Alliance trade association to put pressure on smaller competitors by hindering their access to essential technology and marketing partnerships.

“FanDuel and DraftKings didn’t get their monopoly through a merger,” the letter reads, “so now they’re trying to achieve it by arguably acting as one company.”

The Market

FanDuel and DraftKings collectively control about 80% of the U.S. market. FanDuel leads with about 45%, while DraftKings follows with about 32%. A recent report by FanDuel’s parent, Flutter Entertainment indicates that investments in the online gambling – especially in marketing and technology – are paying off as the industry grows significantly. Total wagers increased from $13 billion in 2019 to $135 billion in 2024, with projections reaching $39 billion by 2030. FanDuel alone reported $4.84 billion in revenue in 2023.

The overwhelming strength of the duopoly creates a significant barrier to entry and stifles innovation. Smaller competitors, often the lifeblood of creativity in emerging industries, are reportedly being squeezed out by the duopoly, but a handful of smaller operators are fighting to compete. BetMGM, the strongest alternative, commands 11% of the market, while Caesars Sportsbook maintains 6%. Further down in the rankings, Bet365 holds 3.5%, while ESPN Bet, a fresh entrant backed by a major media powerhouse, has quickly grabbed 3.7%. Fanatics Sportsbook, leveraging its brand recognition in the sports apparel world, currently holds 2.8% and is working to expand its foothold. These smaller operators play a crucial role in keeping the market from becoming an unchecked duopoly.

Enforcement Blindspot

This case reveals a critical blind spot in antitrust enforcement; that is, non-merger activities that achieve the same monopolistic outcomes. If enforcers fail to act, it will only embolden dominant players in other industries to suppress competition by coordinating without merging.

David Balto is former FTC assistant director of policy and evaluation and attorney adviser to the FTC chair. In a recent article for Legal Dive, Balto expressed his concerns this way: “The case raises an urgent question: Can U.S. antitrust laws prevent firms from achieving through collusion what courts have barred through mergers?” That’s a great question. “As the DOJ and FTC consider next steps,” Balto continues, “the outcome could set a critical precedent for applying anti-competition law in the digital age.”

Claims of Deception, Addiction

The antitrust allegations are the only legal challenges raised in this market. DraftKings is under fire for allegedly misleading consumers with deceptive promotional tactics. In January 2025, class action lawsuits were filed against DraftKings in Illinois, Kentucky, and New Jersey, alleging the company deceives potential customers. The suits claim DraftKings’ “Risk-Free Bets” and deposit-match offers hide from customers the actual risks and terms involved, potentially fueling problem gambling, another concern about the industry.

As sports betting continues to surge its addictive nature and societal consequences are sources of worry. Critics argue that aggressive marketing tactics and misleading promotions fuel the addiction, leading to financial distress and mental health struggles for countless individuals. In response, legal and legislative efforts are ramping up to hold betting companies accountable and implement stronger consumer protections.

Social Casinos

Other tech players are finding challenges in this space. In November 2024, a class action lawsuit accused Apple and Google of knowingly facilitating illegal gambling through online casino apps, allegedly profiting from unlicensed betting platforms disguised as “social casinos” (Bargo v. Apple, 2:24-cv-10805, D.N.J.). The case highlights growing concerns over how dominant tech and gaming companies wield their influence in the online betting space—paralleling the senators’ antitrust allegations against FanDuel and DraftKings.

Conclusion

Coincidentally, it is possible that at least some answers about competitive landscape of online gambling will be answered during the administration of the first president to come from the gaming industry. But his antitrust teams are still getting settled amidst a tornado of activity – or a grinding halt to activity – at some of their fellow agencies.