Categories: Daily Fantasy

FanDuel and DraftKings Headed For a Merger?

The daily fantasy sports industry might soon be introduced to its biggest operator yet. Per reports, the two biggest DFS operators, FanDuel and DraftKings, have had preliminary discussions about a potential merger.

Per reports, the two sides have been talking about a potential deal “for some time”. No agreement has been reached yet, however, and neither DFS operator has spoken out in regards to the merger rumors, first reported by Bloomberg.

Powers Combining

A future merger is a possibility that has been floated around the DFS industry in the past, while DFS operators are known for buying out other competitors or merging them into their own company. DraftKings was even part of one of the biggest buyouts, securing what was once looked at as the third largest daily fantasy sports website – DraftStreet.com.

The merger talk comes at a convenient time, as both sites are still fighting legal battles in an attempt to convince lawmakers that their product is a “game of skill” and not one of chance. Should the daily fantasy sports industry lose that argument, DFS could be seen as online gambling and quickly made illegal across the United States.

To this point, federal law appears to have deemed DFS legal and refers to it as a game of skill. Some states have differing opinions or official stances on DFS, however.

The legal aspect of DFS grew even more with both websites battling via commercial promos at the start of the 2015 NFL season, while an employee scandal also sparked heated debate that – legal or not – daily fantasy sports was an industry that required regulation and monitoring.

Both companies have been lobbying hard to keep daily fantasy sports legal, coming up short in some states and gaining ground in others.

The idea behind a joint merger would be for FanDuel and DraftKings to halt the competition and pool their efforts and resources to both win their legal battles and also form the biggest DFS site the web has ever seen.

Legality Issues

Daily fantasy sports remains a grey area for some, with 10 states ruling it illegal or at least not allowing it to be played due to fuzzy Attorney General “opinions”. These stances have forced FanDuel and DraftKings to pull their services from several states, most notably Nevada, New York and Texas.

Both websites are heavily backed financially, with FanDyel pulling in over $275 million in Series E financing last summer, thanks to Google Capital and Time Warner Investments Group, among other investors. DraftKings was even better, pooling over $300 million in Series D financing last July, with FOX Sports, MLB, NHL and MLS leading the way in funding.

In addition to their high level financing, both FanDuel and DraftKings have various partnerships with numerous sports leagues and teams.

Per Gambling Insider, the majority of those funds have been placed “on hold” while both companies continue with their fight to make DFS legal across the United States.

Share
Kevin Roberts

Recent Posts

  • Gambling Laws
  • Industry

No Special Session for Maine, Sports Betting Bill on Hold Until 2020

On June 19th of this year, Maine’s proposed sports betting bill passed both legislative chambers on the last day of… Read More

July 15, 2019 3:00 pm
  • Gambling Laws
  • Industry

DC Takes a Closer Look at Intralot Betting Contract

Washington, DC is coming under scrutiny for its recent sports betting licensing procedure. The Council of the District of Columbia… Read More

July 9, 2019 11:26 pm
  • Industry
  • Sports

Sports Betting in Puerto Rico Is Just Around the Corner

Puerto Rico is falling on hard times. A major debt crisis and Hurricane Maria have devastated this territory. Sports betting… Read More

July 5, 2019 10:33 pm
  • Gambling Laws
  • Industry

Sports Betting in Indiana to Launch on September 1st

Regulators and operators in Indiana hope to open their sports betting operations on the first day permissible under the new… Read More

July 5, 2019 10:04 pm
  • Gambling Laws
  • Industry
  • UK

New UK Problem Gambling Clinic Opens Its Doors

Back in April, the UK government announced a new “National Strategy” to fight against gambling addiction. It came after numerous… Read More

June 25, 2019 1:18 am
  • Gambling Laws
  • Industry

New York’s Legislature Squashes Mobile Sports Betting

People wanting to wager on sports bets in New York will have to attend one of the four casinos and… Read More

June 21, 2019 10:43 pm