What we thought was going to be a DFS revolution—the merger of the two biggest sites in the game, FanDuel and DraftKings, has been abandoned. You might have heard about the difficulties that the two companies had encountered (we covered the story earlier in the week), but we didn’t think that it would be over this quickly!
Surely many DFS fans assumed that the colossal might of the two DFS giants would be enough to counter the opposition from the FTC? Apparently not! Read on to find out more…
What do the CEOs think?
The DraftKings CEO Jason Robins and the FanDuel CEO Nigel Eccles had this to say in a joint statement: “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. We are considering all our options at this time.”
Nigel Eccles then reiterated this position, speaking solely on behalf of FanDuel: “FanDuel decided to merge with DraftKings last November, because we believed that this deal would have increased investment in growth and product development thereby benefiting consumers and the greater sports entertainment industry.”
He continued, “While our opinion has not changed, we have determined that it is in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company.”
FanDuel DraftKings merger: was it doomed from the start?
While the merger seemed inevitable to many in the DFS world, it appears that some pundits were sceptical all along about whether it would be allowed. These commentators suggested that the FTC would be highly unlikely to permit the move, unless the companies could prove that they would each be unable to function without the merger.
DFS may be a fairly young industry, but it has been fraught with controversy, especially in the US. In 2015, for instance, Eric Schneiderman, the New York Attorney General, opened an enquiry to address how both companies were dealing with fraud. This came very soon after a DraftKings employee had accidentally exposed sensitive information just before the start of the week’s NFL games, and managed to win $350,000 playing on FanDuel.
The game’s legality is also in contention across different states, but thankfully here in the UK we don’t have to worry about that. Nevertheless, this makes us question what lies ahead for the daily fantasy sports industry. Keep reading DailyFantasyUK to find out!