US tech news sources have reported that fierce daily fantasy sports (DFS) rivals FanDuel and DraftKings are heading towards an ‘imminent’ merger.
Following a tough year of legal and regulatory battles for both operators, it has been reported this weekend that the leaderships of both firms are studying a potential merger to fully takeover the US DFS market.
A FanDuel-DraftKings merger had hit international news headlines last June when industry insiders told Bloomberg News that investors and governances of the leading DFS operators were reviewing strategic options.
The updated rumours of a FanDuel-DraftKings merger have been met with mixed reactions.
This weekend US tech news source Recode.net pointed to the hostile relationship between FanDuel and DraftKings leaderships, stating that a combined enterprise would likely have issues appointing a Chief Executive, following years of market battle between the companies.
Furthermore, the union of the DFS market number 1(FanDuel) and number 2 (DraftKings) firms, would likely face a tough probe by US anit-trust and competition regulators, as FanDuel-DraftKings would have an overwhelming market share.
Despite progressing on legal and regulatory fronts, FanDuel and DraftKings still face a number of operational challenges. This October, the New York Attorney General’s office forced FanDuel and DraftKings to pay a combined $12 million fine for ‘deceptive advertising’ of services in the state of New York.
The operators were further warned that they would have to undertake ‘sweeping reforms’ to their marketing operations.