The United States' two top daily fantasy sports sites, DraftKings and FanDuel, have decided not to merge after all. They announced their merger last November. The reason behind the termination? The opposition from federal antitrust regulators.
The Official Statement
FanDuel CEO Nigel Eccles addressed the termination in a statement covered by Axios:
“FanDuel decided to merge with DraftKings last November, because we believed that this deal would have increased investment in growth and product development thereby benefiting consumers and the greater sports entertainment industry. While our opinion has not changed, we have determined that it is in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company.
There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry. We'd like to thank our partners and customers for their patience, support and continued loyalty over the past several months,” Eccles said.
Following the November announcement, Recode explains, the Federal Trade Commission realized the two companies served over 90 percent of the market for fantasy sports sites, and voted in June to block the deal. Faced with an expensive court battle, DraftKings and FanDuel choose to walk away instead.
The move may allow other players in the fantasy sports sector breath easier — like Fandom Daily, a team-based fantasy sports site TechCo profiled last year. If the history of fantasy sports are a good metaphor for the startup world (slow to take root in the local community, but massively boosted by the advent of internet-connected devices and pivoting in order to monetize), then this chapter in their history is a lesson in the inner workings of the Federal Trade Commission and the demand for antitrust regulation in any industry, no matter how fantastic.
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