Senators Mike Lee (R-UT) and Peter Welch (D-VT) have raised serious antitrust concerns about DraftKings and FanDuel's market dominance in the U.S. sports betting industry. In a letter to federal regulators, they allege potentially anticompetitive behavior between the two companies.

The senators highlight several key concerns:

• The companies control over 70% of mobile sports betting market share
• Possible coordinated efforts to prevent competitors from gaining market access
• Alleged interference with competitors' relationships with sports leagues, marketing partners, and vendors
• Potential collusive behavior following their blocked 2016 merger attempt

This scrutiny comes amid the rapid expansion of legal sports betting across America, with 39 states and Washington, DC now allowing some form of sports wagering. The companies leveraged their early dominance in daily fantasy sports to establish leading positions in online sports betting following the 2018 PASPA ruling.

The matter now rests with the Department of Justice and Federal Trade Commission, who must decide whether to launch a formal investigation. Market reaction was initially negative, with DraftKings shares falling 7% and Flutter Entertainment (FanDuel's parent company) dropping 4% before recovering later in the trading day.

The incoming Trump administration's appointment of new leadership at these regulatory agencies may influence whether an investigation proceeds, as current officials Kanter and Khan are expected to depart their positions.

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