DFS giants downplay merger reports
June 16, 2016 9:26 AM
by Phil Hevener
DraftKings and FanDuel are downplaying media reports that the two giants among daily fantasy sports companies could team up according to an Associated Press report.
The companies have spoken about a merger, though officials at both DraftKings and FanDuel have dismissed the reports as speculation.
A merger would help the two companies deal with the challenges and opportunities on a changing landscape as states either allow it with regulations or act to prohibit it. In Nevada, a new company is seeking approval to offer daily fantasy wagers on a pari-mutuel platform.
Last fall, the rivals waged a costly advertising war in the run-up to the NFL season as they battled for supremacy in the rapidly growing industry. While the blitz attracted new customers, it also led to more scrutiny from viewers annoyed at ads and lawmakers learning about the new form of gambling.
Both DraftKings and FanDuel – along with other companies in the daily fantasy industry – are fighting for survival as states seek to impose greater regulations or ban their online contests, which involve players picking teams of real life athletes in order to win cash prizes based on how those athletes perform.
A merger would allow the companies to end their marketing war, save on operational costs and consolidate mounting legal and lobbying expenses, says Kevin Cochran, a D.C.-based legal analyst at GamblingCompliance, an industry publication.
Other experts say it could soften the blow if and when states begin to impose stricter regulations and fees on the industry.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: PhilHevener@GamingToday.com