FanDuel and DraftKings logos

DraftKings and FanDuel To Merge?

There has been talk of a DraftKings FanDuel merger in the air…

Both companies have been communicating about a merger, although they have made no financial transactions. A DraftKings FanDuel merger would involve the two biggest companies in the daily fantasy sports industry coming together. This would certainly make waves in the DFS world.

According to a report from Bloomberg, FanDuel and DraftKings investors have been keen on the companies merging for a while.

DraftKings launched a UK website this year, and FanDuel are looking to follow suit after setting a UK launch date for August.

Update: the FanDuel UK site is up and running as of August 2016.

Teaming up against legal and financial trouble?

The possible DraftKings FanDuel merger comes in light of ongoing daily fantasy sports legality issues in the U.S.

FanDuel and DraftKings are both facing legal challenges in the States, where online gambling is illegal. Side note: thankfully this isn’t the case in the UK!

Certain states have outlawed daily fantasy sports, whereas others have officially regulated it. This all comes down to whether legislators classify daily fantasy sports as a game of chance or skill.

A DraftKings FanDuel merger would certainly help both businesses in terms of competition. These operators are the two biggest players in daily fantasy sports. Not having to compete against one another will lighten the financial load the companies both face.

Rolls of United States 100 dollar bills.

In 2015, both daily fantasy sports sites were making over $1 billion from investors. Those valuations have since fallen by approximately 50%.

FanDuel have stopped offering paid games in 12 states and DraftKings in 11. This is due to daily fantasy sports being deemed illegal or subjected to fierce debate.

On the plus side, 6 states have officially legalised and regulated DFS. These are Virginia, Indiana, Tennessee, Kansas, Colorado and Missouri.

Both operators pulled out of New York this March, after Attorney General Eric Schneiderman ordered them to cease and desist. In a settlement with Schneiderman, they are hoping to reach a legislative solution.

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