The merger of daily fantasy sports operators DraftKings and FanDuel may not proceed due to regulatory hurdles, according to FanDuel’s chief executive.
On Tuesday, Recode published an interview with FanDuel CEO Nigel Eccles in which he stated that his company was “evaluating options” that included walking away from the proposed merger with DraftKings if the companies can’t convince the Federal Trade Commission (FTC) that the linkup won’t significantly decrease competition in the DFS marketplace.
In mid-June, the FTC filed suit to block the merger based on the regulator’s belief that the combined entity would control over 90% of the US DFS market. The companies have argued that their alleged DFS dominance has to be seen in the context of the much larger weekly- and season-long fantasy market. An administrative trial has been set for November and the parties will hold a scheduling conference this Friday (14).
Ever since the FTC filing, both Eccles (pictured) and DraftKings CEO Jason Robins have repeatedly stated that they are “considering all our options” but Eccles’ comments to Recode also included comments on his belief that FanDuel was enjoying “probably the fastest growh in the company’s history” and could succeed on its own if the merger is scrapped. (The FanDuel brand was reportedly slated to be absorbed into DraftKings’ operation if the merger went ahead.)
Documents filed in response to the FTC suit indicated that FanDuel lost $59m in just the first 10 months of 2016 and the company is reportedly mulling a new funding round to ensure it has enough capital to make it through the upcoming all-important NFL season.
Nonetheless, Eccles told Recode that he felt “next year will be a break-even year for us” and that FanDuel had the ability to survive and even thrive on its own. Eccle’s optimism is based on plans to continue adding additional sports to its list of DFS options, launching a season-long fantasy product and cutting back on its marketing excesses of recent years.
