After Months of Rumors DraftKings and FanDuel Merge
After weeks of intensive rumors, DraftKings and FanDuel have agreed to merge in what only a few years ago was unthinkable. The once fierce rivals have had to eat a lot of humble pie in the last year as their huge success and public profile made them the target of legislators like NY Attorney General Eric Schneiderman.
There is no denying the fact that the DFS industry came close to the brink of collapse as lawsuit after lawsuit kept both operators busy with surviving and left little time to devote the the growth of their companies. Both companies have had to come to terms with the fact that their glory days of unlimited marketing budgets and huge rounds of funding had come to an end as the legal status of DFS was challenged.
The turning point came when both operators came to an agreement with NY Attorney General Schneiderman which would see them pay a fine but allowed to return to New York which is seen as a key market to both operators. The general consensus now is that DFS operators will be regulated much like gambling operators and will have to pay licensing fees.
The merger is expected to be finalized in the second half of 2017 after getting the green light from regulators. Until then both sides will continue to operate their own brands. DraftKings CEO Jason Robins will serve as CEO with FanDuel chief Nigel Eccles becoming the chairman. A new board will be appointed and will be made up of three directors from DraftKings, three from FanDuel and an independent director. The headquarters for the new company will be split between Boston and New York offices.
In a statement DraftKings CEO Jason Robins commented on the merger,” Joining forces will allow us to truly realize the potential of our vision, and as a combined company, we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately.”
FanDuel Chief Nigel Eccles said,” While both companies have accomplished much already, this transaction will create a business that can offer a greater variety of offerings, appealing to new users, including the tens of millions of season-long fantasy players that haven’t yet tried our products.”