Merger Between DraftKings and FanDuel Imminent
Rumors of a merger between the two DFS heavyweights DraftKings and FanDuel have been up in the air for a long time. A year ago we reported on FanDuel founder Nigel Eccles dismissing the idea of a merger and was quoted as saying,” If we merge, we take on those deals that we turned down. That doesn’t improve our economics, it makes it worse, I can see why it would be attractive to them. I don’t know why they think it would be attractive to us.”
ESPN are reporting that the merger is “imminent” and it I just a matter of the final details that are been finalized. With the New York legal battle behind them sources say that the merger could be announced any day. Details that are been discussed include whether one or both site will be used, where the headquarters will be located and of course the new name.
According to insiders both companies will share the costs and revenues of the new company, DraftKings were evasive when asked for a comment and said,” As we have stated previously, a potential combination would be interesting to consider. However, as a matter of policy, we don’t comment on rumors or speculation, and there can be no assurances at this time that any discussion about a combination would result in an agreement or merger.”
FanDuel would not comment on the latest rumors but sources say that DraftKings CEO Jason Robbins is set to be the new CEO for the joint company. As we mentioned earlier the relationship between the two CEO’s has always been contentious but the legal battles in the last year have forced them to join hands and fight a real threat to their business. Added to this are the reports that both companies have lost a lot of their value in the last year and both are reportedly struggling to fulfill their financial day to day commitments to vendors and suppliers. As sign of the troubles is FanDuel recently laying off 60 workers.
While the proposed merger makes sense for both FanDuel and DraftKings, many are asking the question if this will be good for the DFS players as it will create a monopoly which controls over 90 percent of an industry. It remains to be seen if the merger will be blocked by regulators.