Reports: FanDuel and DraftKings agree merger terms
Operators yet to confirm tie-up but DraftKings tells EGR a merger is "interesting"
FanDuel and DraftKings have agreed merger terms, with DraftKings CEO Jason Robins set to lead the combined company, according to media reports.
FanDuel’s co-founder Nigel Eccles will be chairman of the board of the new firm, which will be evenly made up of the two companies, according to a Bloomberg source.
The operators have not yet confirmed the speculation, although DraftKings told EGR this afternoon that a combination of the two firms would be “interesting”.
The official statement 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 rumours or speculation, and there can be no assurances at this time that any discussion about a combination would result in an agreement or merger.”
A mega-merger has been mooted for months with both companies said to be struggling financially after FanDuel reportedly laid off 60 staff last month.
A tie-up would allow both firms to reduce their lobbying, legal and marketing costs.
However, legal experts have questioned whether a merger would get past US competition authorities, with a combined company controlling more than 90% of the DFS market.
Other industry insider have questioned the commercial sense in merging, with both firms having spent to acquire the same users.
“Personally I think it would dumb for FanDuel to tie up with DraftKings, which has significantly more legal jeopardy in Florida and New York,” Joe Brennan, CEO of FastFantasy, told EGR. “Plus, they’d be paying twice for three quarters of the same customers.”
Smaller operators also welcomed the news, with Trent Frisina, the co-founder of Fantasy Aces, telling EGR: “This is really good for us, especially if one of the platforms is shutdown.”