DraftKings, FanDuel In Merger Talks: ReportNew York-Based FanDuel Could Acquire Boston-Based DraftKings |
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DFS leaders DraftKings and FanDuel are in talks about a merger, according to a report from Bloomberg. A report from Reuters said that the latter would be acquiring the former if a deal is reached.
The discussions are in their early stages, according to reports.
Legal challenges in a nearly a dozen U.S. states are the reason for the talks, the reports said. A combined company would be able to save on legal and lobbying expenses.
While daily fantasy sports played over the Internet for real money is OK under federal law, many states across the country have looked at whether the contests, which involve skill and some luck, amount to unauthorized gambling. Nevada was one of the first states to do so.
DraftKings doesn’t offer its core product in nine states, while FanDuel prevents residents in 10 states from playing. Six states have decided to regulate the games.
A year ago, both companies had $1 billion valuations, but by mid-2016, according to a Bloomberg source, their valuations have each been cut in half.
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