ESPN published an article on Friday claiming that the two dominant players in the daily fantasy sports industry, DraftKings and FanDuel, are finalizing terms of a merger.
ESPN quoted a number of anonymous sources close to the matter as revealing that an agreement between the two players was “imminent” and that a merger could be announced as early as next week.
DraftKings and FanDuel have been hit by lobby and litigation costs over the past year and a half during which time the gambling or non-gambling status of DFS has been debated in the United States by state enforcers and lawmakers. This has resulted in the two firms recently agreeing to a settlement of $6 million each in order to make the charges of the New York Attorney General go away.
According to ESPN’s sources, negotiations covered a vast range such as the merged company executive leadership, the name of the combined company, how many websites it would operate and where it would be headquartered.
A DraftKings spokesperson commented on the speculated merger by repeating that a potential combination would be interesting to consider but that as a matter of policy they do not comment on rumors or speculation and they can give no assurances at this time that any discussion about a combination would result in an agreement or merger.
According to the ESPN article, the Federal Trade Commission could possibly object to a merger of the two companies that are believed to control more than 90% of the US daily fantasy sports market. It is estimated that the two DFS companies combined processed contest fees worth $3 billion in 2015.
