Boston-based DraftKings and its chief rival, FanDuel Inc., said Thursday they would walk away from their planned merger, abandoning a deal that had promised to reshape the multi-billion dollar daily fantasy sports business before federal antitrust regulators stepped in to block it.
The decision comes as the two companies were facing a difficult legal battle against the Federal Trade Commission, which in June sued to stop the merger. The agency argued that the combined company would be a “near monopoly,” with more than 90% of the US market for paid daily fantasy sports.
DraftKings and FanDuel countered that antitrust regulators had misunderstood their business. Both companies argued that they competed more broadly with fantasy sports games that last an entire season.
By abandoning a deal the companies had contended was critical to their future, DraftKings and FanDuel now return to the familiar — and costly — role of battling each other for the upper hand in the still young daily fantasy sports business.
Both have gone through a torrid growth period, fueled by more than US$1 billion raised between the two in multiple rounds of venture financing.
A research report by Eilers & Krejcik Gaming said DraftKings’ 2016 revenue after paying prize money was US$169 million. FanDuel, formed in 2009, brought in US$166 million.
Full Content: Washington Post
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