The attorneys general of both California and Washington, D.C., are planning to join the FTC in a federal lawsuit, asking the court to issue a preliminary injunction to stop the deal pending the outcome of an administrative trial, now slated for November. In its complaint, the FTC said DraftKings and FanDuel are each other's most significant competitor.
Currently, DraftKings is the largest fantasy sports service operating in the United States, with FanDuel coming in as the second largest.
FanDuel and DraftKings, by far the two biggest DFS sites, announced in November that they would combine forces in order to "create a stronger entity that can focus on growing the fantasy sports market by developing new products and features, delivering enhanced user experiences, and creating an overall stronger fantasy sports community".
The vote to approve the suit was 2-0, meaning chairman Maureen Ohlhausen, a Republican, and Terrell McSweeny, a Democrat, agreed.
The L.A. Daily News reported that both companies will continue operating separately for the time being and that it's unlikely a merger will take place ahead of this year's National Football League season, the daily fantasy industry's most lucrative time of year. Last year, the companies both found themselves in a legal battle with New York Attorney General Eric Schneiderman, who stated that the sites violated state gambling laws.
It has previously been reported that DraftKings and FanDuel would constitute more than 80 percent of the daily fantasy sports market.
While fantasy sports have been around for decades, the daily games have become more popular as of late.