Joint rulers of this day-to-day fantasy activities (DFS) market DraftKings and FanDuel have actually walked away from a proposed merger of equals, less than the usual month after the Federal Trade Commission (FTC) moved to block the offer on grounds of antitrust 'fair competition' issues.
The offer's off: DraftKing's Jason Robins (left) and FanDuel's Nigel Eccles announced on Thursday that their businesses would be going it alone, calling down a possible FTC fight in the grounds of antitrust violations. (Image: Reuters)
The 2 companies announced the termination of the tie-up on Thursday, simply days after that they had each filed appropriate briefs to a federal district court, vigorously protecting the merger.
But with both companies already fighting legal actions on several fronts, it looked like another costly and possibly doomed battle that is legal ahead. A source told ESPN that taking on the FTC would likely cost some $12 to $15 million.
Ironically, consolidation might have dramatically slice the amount of appropriate and lobbying costs the two companies invest fighting for legal DFS in states across the usa. It could also remove the expenses associated with trying to out-market each other.
The failure of the deal leaves both in precarious positions that are financial as neither has ever been profitable. Documents related to the merger leaked last thirty days revealed that DraftKings