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US: The world’s biggest fantasy-sports sites are merging

 |  November 1, 2016

DraftKings and FanDuel, the two largest, daily fantasy-sports start-ups in the world, may be joining forces. Following months of talks, negotiations for a merger are finally drawing to a close, Bloomberg reports, appeasing investors who want to see the two nearly identical companies stop wasting millions fighting each other, and instead work together to combat challenges from state lawmakers and regulators.

In the event of a merger, DraftKings CEO Jason Robins would serve as chief executive of the combined entity, resolving the question of who would run the new company, Bloomberg reports. Previously, Robins has said he’d be amenable to a merger. FanDuel CEO Nigel Eccles, who has shut down such speculation about a merger in the past, is expected to serve as the combined unit’s chairman. “If we merge, we take on those deals that we turned down. That doesn’t improve our economics, it makes it worse,” he said last year. “I can see why it would be attractive to them. I don’t know why they think it would be attractive to us.”

Now, presumably, Eccles has changed his tune. Advertising tracking company iSpot estimated that DraftKings and FanDuel had spent more than $220 million in total over a three-month span in 2015, while The Wall Street Journal notes that both companies will have spent between “$5 million and $10 million” on lobbying in 2016. Bloomberg reports that both companies may have lost about half their peak valuations in the process. By coming together, DraftKings and FanDuel can stop bleeding money competing with each other and instead double their efforts to fight the rising tide of state legislation aimed at putting them out of business. While DraftKings and FanDuel have been waging a lobbying campaign to exempt themselves from gambling laws, a number of states have questioned whether daily fantasy sports are any different from illegal gambling.

Full Content: Bloomberg

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