Merger Between DraftKings and FanDuel Officially Scrapped
The proposed merger between DraftKings and FanDuel has officially been scrapped. This follows the Federal Trade Commission stating last month that they would block the deal as it is not in the interests of the public. The FTC believe that DraftKings and FanDuel combined would control 90% of the DFS market which would make it a monopoly. Industry insiders believe that this number is actually as high as 95%.
In a statement released by FanDuel CEO Nigel Eccles he said,” 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. 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. There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry.”
In a similar stamen DraftKings said,” We appreciate the continued loyalty of our players – it is you, our customers who have made this all possible – and we look forward to kicking off what is going to be our best NFL season yet.”
The aim of the merger was to combine resources and to stop spending millions on advertising campaigns that compete with each other’s products. Both DraftKings and FanDuel have defended the planned merger and said that it would not result in a higher price for customers. They went on to say that regulators were pursuing “an unnecessarily rigid and uninformed application of the antitrust laws.”