DraftKings, FanDuel scrap merger plan

DraftKings and FanDuel have scrapped their merger plans after initial proposals were rejected by the US Federal Trade Commission (FTC).

An initial scheduling conference with the FTC national consumer protection agency was set to occur before an administrative judge today (Friday), but the two daily fantasy sports (DFS) operators announced on Thursday that they will now seek to pursue their own development.

A deal between the two companies had been mooted for some time and an agreement was announced in November 2016. However, the FTC, estimating the pair held 90% of the US market, raised concerns over the impact the deal could have on competition.

The FTC said it would join with the state Attorneys General of California and the District of Columbia to file a complaint in federal district court to seek a preliminary injunction to halt the deal and “maintain the status quo”, pending an administrative trial.

In a statement, FanDuel chief executive Nigel Eccles said: “FanDuel decided to merge with DraftKings last November, because we believed that this deal would have increased investment in growth and product development thereby benefiting consumers and the greater sports entertainment industry.

“While our opinion has not changed, we have determined that it is in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company. There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry.”

DraftKings chief executive, Jason Robbins, said: “We have a growing customer base of nearly eight million, our revenue is growing over 30 per cent year-over-year, and we are only just beginning to take our product overseas to the billions of international sports fans we have yet to even reach.”

He added: “We believe it is in the best interests of our customers, employees, and investors to terminate our agreement to merge with FanDuel and move forward as a separate company.”

source : www.igamingbusiness.com

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