Tech business news sources are reporting that leading US daily fantasy sports operators FanDuel and DraftKings are reaching a conclusive agreement with regards to a merger.
Since October, the governances of the DFS operators have been in ‘fast track’ discussions with regards to creating an outright market-leading enterprise.
On Wednesday, former ‘Fortune’ finance editor Dan Primack revealed that according to three sources close to the organisations, merger terms had been agreed between FanDuel and DraftKings stakeholders.
Primack details that the combined enterprise will be led by DraftKings’ CEO Jason Robins, with FanDuel founder Nigel Eccles promoted to Chairman.
The merger is set to be treated as a 50/50 partnership, with each of the operators’ core investors receiving three board seats within the new enterprise. Furthermore, the merger will not include any new equity investment into the combined company.
As present, both FanDuel and DraftKings governances have not officially confirmed the merger and have further made no comment on the speculation.
Business news sources have detailed that the merger would likely face a tough probe by US anit-trust and competition regulators, as a FanDuel-DraftKings combination would have an overwhelming market share.
Despite progressing on legal and regulatory fronts, FanDuel and DraftKings still face a number of operational challenges should they be allowed to merge.
This October, the New York Attorney General’s office forced FanDuel and DraftKings to pay a combined $12 million fine for ‘deceptive advertising’ of services in the state of New York. The operators were further warned that they would have to undertake ‘sweeping reforms’ to their marketing operations.
Source: SBC News
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