Rumours persist on a Draftkings-Fanduel merger

ESPN triggered renewed speculation on a DraftKings – FanDuel merger Friday when it published an article claiming that the two dominant players in the daily fantasy sports industry, are finalising terms of a merger.

Quoting multiple but anonymous sources close to the matter, ESPN said an agreement was “imminent” and could be announced as early as next week.

The two companies have been battered by lobbying and litigation costs over the past eighteen months as the gambling or non-gambling status of DFS has been debated in the US by state lawmakers and enforcers, resulting most recently in the two firms agreeing a $6 million apiece settlement to make New York AG charges go away (see previous report).

ESPN’s sources said that the negotiations covered a wide range and included the merged company’s executive leadership, the name of the combined company, how many websites it would operate, and where it would be headquartered.

Approached by ESPN, FanDuel declined to comment, whilst a DraftKings spokesperson waffled:

“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.”

However, as ESPN points out, the chief executives of both companies have in the past publicly acknowledged that a merger has been the subject of exploration since January this year.

The Federal Trade Commission may object to a merger of two companies that are estimated to control over 90 percent of the US daily fantasy sports market, the ESPN article notes, revealing that the two DFS companies combined processed $3 billion worth of contest fees in 2015.

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