DraftKings, FanDuel drop merger after government scrutiny

DraftKings, FanDuel drop merger after government scrutiny
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DraftKings and FanDuel, the two leading fantasy sports betting sites in the U.S., said on Thursday that they’re dropping their plans to merge.

In a statement, FanDuel CEO Nigel Eccles said that he thought the merger would help the two companies and also benefit consumers.

“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,” Eccles's statement read.

The announcement comes after the government sought to block the merger between the two companies out of concern that it would “deprive customers of the substantial benefits of direct competition” between the two companies. DraftKings and FanDuel are the two largest daily fantasy sports betting sites in the U.S.

The Federal Trade Commission (FTC) said that if the merger had gone through, the combined company would control 80 percent to 90 percent of the market.

DraftKings and FanDuel contended that they operated in a larger market and actually compete with yearlong fantasy sports platforms like those offered by ESPN, Yahoo and others, diminishing their dominance on the market.

After the FTC’s decision in June, the companies were faced with the decision of engaging in a pricey legal battle or dropping the merger. On Thursday they announced that they had decided to do the latter.

In a release, DraftKings CEO Jason Robins said that despite the failed deal the company was still thriving.

“We have a growing customer base of nearly 8 million, our revenue is growing over 30% 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,” Robins wrote.