Source: Kindred takeover of DraftKings is “highly unlikely”
DFS operator understood to be happy going it alone on sports betting
Rumours of such a takeover first appeared Friday evening at news outlet Legal Sports Report, but a source dismissed the speculation outright, saying there had been “no discussions of any substance” between the two companies and a completed deal was “highly unlikely”.
Both companies were non-committal when contacted by EGR, although Kindred’s new VP of USA Manuel Stan added: “As I said previously, we are considering any interesting partnerships with a good strategic fit but we are not in a position to make any further comments at this point.”
A DraftKings spokesperson said: “As a result of the Supreme Court’s decision to overturn the ban on sports betting, DraftKings has been approached by numerous companies from a broad range of industries interested in investment and partnership opportunities.
“As the world’s largest fantasy sports company with nearly 10 million customers in the U.S. and world class technology, DraftKings is well-positioned to capitalize on this emerging industry. However, DraftKings does not comment on the specifics of any discussions.”
The speculation comes soon after DraftKing’s chief rival FanDuel was snapped up by a listed European gambling operator in the form of Paddy Power Betfair.
However, DraftKings is seen as less likely to do a deal, by virtue of its relative strength in the DFS market (approx. 60% share) and extensive preparation for sports betting so far, which have included a flurry of personnel hires and investment in marketing.
Eilers & Krejick said in a note last week: “FanDuel’s positioning for sale was clearly broadcast on a number of levels: significant job cuts, surrendering market share, elevating a CEO who was well-equipped to execute a sale.
“We’re not seeing – or hearing – anything along those lines from DK, implying that a sale simply isn’t a priority for the company at this stage of the game.”
In related DraftKings news, the company also launched its DFS product in Australia yesterday and noted it was seeing a “very good inflow of customers”.