Attempted FanDuel-DraftKings Merger Doesn’t Pay Off

Daily Sports Fantasy titans FanDuel and DraftKings abandoned their attempted merger this week. The two industry leading sites have abruptly announced that they will remain independent. This comes after their planned merger was met with heavy opposition from the FTC.

This is big news for more than 5.5 million users who use FanDuel and DraftKings to make weekly and daily bets on gameday. Although there was no telling if a merger would be a negative, many worried a single, industry-dominating monopoly controlling 90% of the DFS market would skyrocket prices.

The absence of a merger means no monopoly, but it doesn’t necessarily mean devoted DSF fans can rest easy. Unfortunately for FanDuel and DraftKings, they’re still in hot water. Both companies must continually fight for and maintain their legality. The original goal of the merger, as mentioned previously, was to reduce these lobbying costs. In fact, some see the abrupt announcement to abandon the merger as a sign of financial struggles for both companies. According to ESPN, “Neither company has reached profitability”, and maybe their decision to stop fighting the FTC signifies deeper financial issues.

Rachel Hirsch, an attorney for Washington, D.C.-based firm Ifrah Law who specializes in FTC investigations also told ESPN that "The timing of the withdrawal from the merger appears to indicate that there is more behind the decision than cost savings”.

Speculation aside, DraftKings and Fanduel will stay independent and come football season, the landscape of fantasy sports will remain largely the same. Just remember, regardless of FanDuel or DraftKing and the prices they maintain, if you bet against Tom Brady, you're going to have a bad time. Facts.

 

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  • published this page in Blog 2017-07-14 14:48:53 -0400