Interactive
US – DraftKings and FanDuel agree to merge
By Phil - 21 November 2016
The world’s two biggest daily fantasy sports operators DraftKings and FanDuel have decided to merge to give themselves more chance of overcoming the cost of regulatory and legal hurdles.
The companies said the merger would allow greater investment in ‘growth opportunities and an accelerated path to profitability.’
DraftKings CEO Jason Robins said: “We’re excited to announce that DraftKings and FanDual have reached a merger agreement. We believe this merger will enable us to further accelerate our investments in product innovation, promotions and a high quality customer experience. We recognise that there will be lots of questions and we’re committed to maintaining an open dialogue throughout the process. Joining forces will allow us to truly realise the potential of our vision, and as a combined company, we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately. We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform.”
“By combining and streamlining resources, FanDuel and DraftKings can work more efficiently with state government officials to develop a standard regulatory framework for the industry.”
The companies promised to keep their commission fees and structure competitive, adding: “We know that there are other platforms players could go to if we tried to raise commissions.”
Mr. Robins will serve as CEO of the new company, while FanDuel chief Nigel Eccles will be chairman. The new board will comprise three directors from FanDuel, three from DraftKings and an independent director, with the company’s headquarters divided between New York and Boston offices.
It is not know yet whether both brands will be maintained going forward. The deal is expected to close in the second half of 2017.
Daily Fantasy Sports allows players to build virtual sports teams using real sports stars from a given league. The team’s stock fluctuates depending on the performance of its team members in real-life sporting events. DFS operators make their money from entry fees. FanDuel generated revenues of $100m last year. Prior to the crackdowns by many states on DFS, both companies had been valued at over US$1bn.
