Daily fantasy sports (DFS) has taken quite a few hits in the US since the past year. A lot of legislation has been made that puts a lot of obstacles in DFS operations in the country. Revenues are down and the operators are trying their best to recover from their losses. The two biggest names in the DFS business, FanDuel and DraftKings, are trying their best but getting back their original profits may require a little more effort.
This is probably the reason the two companies have solidified plans for a merger between the two companies. There have been rumors of mergers since early this year. FanDuel and DraftKings represent the two biggest DFS operators in the US and the two are also its most visible faces with their media blitz. A merger between the two would mean a big shot in the arm to the DFS industry as the two combine their customer base.
Though both FanDuel and DraftKings camps have declined to comment, it seems that the two companies have been in talks for months now. One of the main sticking points was who exactly would be running the company. Now it seems the decision has been made.
Reports indicate that DraftKings CEO Jason Robins will be running the merged company as its CEO if a deal gets done. FanDuel CEO Nigel Eccles, on the other hand, would become chairman of the board.
This is a good move for both company heads. This means that they both retain control of the resulting company from the merger, at least in some way. Profits would be coming in from the larger coverage and keeping their influence in the industry is necessary.
There are still obstacles in the way, though. One of the biggest of them is the US antitrust laws. FanDuel and DraftKings currently control 90 percent of the DFS market in the US between them. If they do merge, this means that the market is verging on a monopoly and the law frowns on that.
A recent merger in the UK also faced that problem. When Ladbrokes and Coral merged early this year, Ladbrokes had to sell quite a bit of its betting parlors to give competitors a fair chance. People can expect similar measures to be placed on a FanDuel and DraftKings merger.
The future of DFS, however, is looking bright. Last month, FanDuel and DraftKings managed to reach a $6 million settlement with the New York Attorney General’s office over issues of false advertising. This is after having been banned and then reinstated in the New York state. The two companies’ legality is still pending in many other states including Texas, Arizona and Louisiana, but some US states have already opened their doors to them—thanks to promises of tax revenue.
Moreover, how this merger can speed up the rise of Bitcoin fantasy sports is another possible effect that may happen not too long after. Currently, there are a few Bitcoin gambling sites that already offer fantasy sports with Bitcoin, but this is still far from the success of Bitcoin sports betting, dice and casino games.