After agreeing to a merger with fantasy sports rival DraftKings last November, FanDuel have now announced that they are abandoning their plans to combine the two companies.
The announcement comes a mere month after America’s Federal Trade Commission raised “serious competition concerns” about the proposed merger.
If they merger had gone ahead, the two fantasy sports giants would have together controlled 80 % of the US market for their product.
In a statement on the FanDuel website, CEO Nigel Eccles said that terminating the merger was “in the best interest of our shareholders, customers, employees, and partners”.
He 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. We’d like to thank our partners and customers for their patience, support and continued loyalty over the past several months.”
DraftKings CEO Jason Robins posted a similar statement on his company’s website where he stated that DraftKings would “move forward as a separate company”.
He stated: “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. This will allow us to singularly focus on our mission of providing the most innovative and engaging interactive sports experience imaginable, forever changing the way fans connect with teams and athletes worldwide. We appreciate the continued loyalty of our players – it is you who have made this all possible – and we look forward to kicking off what is going to be our best NFL season yet!”
It is not the first time that FanDuel has faced legal issues. At one point, FanDuel and DraftKings had to cease operating in New York, while states like Alabama, Mississippi and Texas ruled that daily fantasy sports sites ran afoul of local restrictions banning online gambling. The U.S. Congress also threatened to intervene.