FanDuel and DraftKings are in merger talks, reports Bloomberg, though they caution that no deal has been finalized between the two companies.
That FanDuel and DraftKings would see merging as an attractive proposition comes as no surprise. They have each spent hundreds of millions of dollars on advertising in an attempt to outdo each other, are staring down the barrel of a number of lawsuits, and are currently banned from operating in 12 U.S. states. With little difference between their offerings, it makes sense to combine and instead spend their money fighting off legal challenges and lobbying state legislatures.
According to Bloomberg, last year both FanDuel and DraftKings were valued at over a billion dollars each, but those valuations have since been halved. DraftKings has raised $445 million in venture capital funding and FanDuel has raised $361 million, with sports broadcasters, teams, and owners putting up much of that $806 million in funding.
Of course, as FanDuel and DraftKings are the two largest daily fantasy operators, the deal will be subject to major anti-trust scrutiny. If regulators decide that daily fantasy is its own category, and not simply a subset of fantasy sports more generally, a merger could be disallowed.