Daily fantasy giants DraftKings and FanDuel have reportedly been planning to merge for almost a year, a move which would have consolidated power such that around 90 percent of the daily fantasy industry would belong to one mega company. The Federal Trade Commission opposed the merger on the grounds that it would represent a “near monopoly,” and this afternoon, the two companies called off the planned merger.
Both companies announced the decision, and DraftKings sent the following email to players:
Today we formally terminated our merger with FanDuel and will withdraw litigation from the Federal Trade Commission (FTC). This means we will move forward as a separate company, which we believe is the best course in the interest of you - our customers and avid sports fans.
We want to reassure you that you will not notice any changes to your account or your experience with us as a result of this decision. We will continue to offer best-in-class contests, prizes, and offerings to our players. We will continue to focus our resources and expertise on enhancing our products and features so we can deliver the exceptional sports entertainment experience you have always had and love with DraftKings.
DraftKings remains the preeminent platform in the daily fantasy sports industry. As a result, we are well-positioned to serve as a global hub linking fans to the sports, teams, players and game content they love.
This is an exciting time to be a sports fan and daily fantasy player. As we gear up for another successful NFL season, we will continue to put you - the sports fan - at the center of everything we do. We are excited to make this football season the best one yet with new products, innovative features, and exciting contests ready to be rolled out soon.
If you have any further questions about this announcement, please visit our dedicated frequently asked questions section on the DraftKings website.
Thank you for your continued loyalty throughout this process. We have the best fans in the world and could not have done any of this without you.
Once the FTC moved in, it was hard to see the merger being completed. The two companies have been beset with shared ethical scandals and complete control over the DFS market would have been an ethically dubious proposition in an environment with such a high risk for fraud. Someone close to the companies spoke to ESPN and spun the loss as a positive that will allow the two companies to focus on keeping their products legal as more states crack down:
“If everyone is being honest with themselves, the merger was off the second the FTC’s decision was announced,” a source with close ties to the companies and CEOs told ESPN. “Both companies can use the money that would have been spent on litigation on government affairs. I’m obviously biased, but I think it is a sign of their maturation. Rather than burn a pile of cash with little to show for it, use the money to continue to shore up any remaining concerns about legality in key states.”