Two U.S. senators have raised alarms about alleged anti-competitive behavior by DraftKings and FanDuel, urging federal antitrust authorities to investigate their actions that may be stifling competition in the emerging sports betting market.

Senators Mike Lee, a Republican from Utah, and Peter Welch, a Democrat from Vermont, sent a letter Thursday to the Federal Trade Commission (FTC) and the U.S. Department of Justice’s Antitrust Division. They expressed concern over "reports" suggesting that the two dominant sports betting platforms are engaging in coordinated efforts to limit the market entry of smaller, innovative competitors.

The letter accuses DraftKings and FanDuel of working together to pressure key business partners—including sports leagues, marketing affiliates, and payment processors—to avoid doing business with new entrants to the sports betting space. The senators argue that such tactics could severely hamper the growth of new companies, preventing them from securing essential partnerships, technology, and capital to compete effectively.

"Such coordinated attacks risk cutting off these new, innovative competitors from critical technology inputs and marketing partnerships," the senators wrote. "Even modest obstruction in these negotiations can delay entry and expansion, and potentially deprive the new entrants of access to the capital needed to vigorously compete with the larger players, FanDuel and DraftKings."

The letter also highlights previous antitrust actions against the two companies. In 2016, the FTC and state enforcers from California and Washington, D.C., sued to block a proposed merger between DraftKings and FanDuel, arguing that it would consolidate over 90% of the market for daily fantasy sports, harming consumers by reducing competition. The merger was ultimately abandoned the following year after continued scrutiny from regulators.

Since then, DraftKings and FanDuel have expanded their dominance into the online sports betting market. The senators warn that the two companies are now using their substantial market power in both daily fantasy sports and sports betting to prevent the rise of new challengers.

"FanDuel and DraftKings were prevented from merging because it would have substantially lessened competition and harmed consumers by forming a monopoly," the letter states. "They should not be allowed to accomplish through collusion what was prevented through acquisition."

In response to the senators' letter, FanDuel declined to comment, while DraftKings did not immediately provide a statement.

The concerns raised by the senators underscore the growing scrutiny of the expanding sports betting industry, which continues to evolve rapidly across the United States. As the market matures, regulators are likely to face increasing pressure to address potential anti-competitive practices that could limit consumer choice and innovation.