DraftKings and FanDuel have agreed to merge, following weeks of speculation.
Late last month, it was announced that the two fantasy sports giants were looking to merge into one company, with the companies having discussed a location for the new company, as well as the new websites, executive leadership and more. Now, the move has become a reality.
The deal is still pending regulatory approval and both companies have outstanding debts, but if everything goes according to plan, the merger will be complete in the second half of 2017. Until then, the companies will operate separately.
The world of online gambling is a tricky one as there are always costs to be considered due to the legality problems of online fantasy sports. FanDuel recently reduced its workforce by 60 workers, and both companies have revealed that they are behind on a number of payments as they seek to get fantasy sports approved.
DraftKings CEO Jason Robins said that joining the two companies will help them move their vision forward as the company looks to break new ground in the fantasy sports realm. Robins would remain boss of the new company if the merger is completed.
New York State attorney general Eric T. Schneiderman shut down FanDuel’s site in October 2015 after a DraftKings employee won a jackpot at the rival company, claiming the companies may have been using inside information to help customers on each other’s sites.
A slate of class-action lawsuits followed, and Schneiderman made fantasy sports a form of illegal gambling. Gov. Andrew M. Cuomo then legalized the practice in August.
