On Monday, Bloomberg reported that daily fantasy sports operators DraftKings and FanDuel are coming closer to reaching a merger deal. Their corporate governances are “hammering out” combined enterprise details for stakeholders and investors.
DraftKings Co-Founder, Jason Robins will reportedly take over as CEO and FanDuel Co-Founder and CEO Nigel Eccles would be promoted to the position of Chairman of the Board.
Although the companies have long been bitter rivals, speculation has surrounded the possibility of a merger for months as their legal and regulatory problems have mounted.
The merger has been speculated for months and championed by investors given the company’s similar business strategies and regulatory issues.
The new company is expected to raise money shortly after the merger, as it makes financial sense for both companies to pool their resources instead of spending copious amounts competing for the same target audience.
Nonetheless, DrafKings has declined to comment on the potential merger saying: “As we have stated previously, a potential combination would be interesting to consider. However, as a matter of policy, we don’t comment on rumours or speculation, and there can be no assurances at this time that any discussion about a combination would result in an agreement or merger.”
There is question whether the deal could go through given the companies’ dominating share of the market. If combined, DraftKing and FanDuel would allegedly control more than 90% of the daily fantasy sports market.
The proposed merger is reportedly nearing finalisation, with ESPN describing the deal as “imminent” and most likely to be announced as early as this coming week.