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DraftKings Welcomes the Merger with FanDuel. This time for real?

DraftKings Welcomes the Merger with FanDuel. This time for real?

During the last 18 months, the talks about the possible merger of two daily fantasy sports companies been heard, but no agreement is imminent, according to Jason Robinson.

The Chief Executive Officer at DraftKings Inc. Jason Robinson explained that the negotiations about the merger with FanDuel Inc, their major competitor in the market of fantasy sports, have been held during the last year and a half.

DraftKings Welcomes the Merger with FanDuel. This time for real?

The Possible Benefits

Although he said that no agreement is imminent, Mr Robinson pointed at the advantages of this merger at his onstage interview in San Francisco during a technology conference. He told that it would be good to enlarge the number of gamblers-fans of fantasy sports teams every week to fight for wins. “Where that actually leads—and when—we’ll see,” Robins told at TechCrunch Disrupt. “When the time is right, there’s potential.”

The CEO also explained that it is possible to reduce legal and lobbying costs, combining the two private companies DraftKings and FanDuel, which are pushing for laws that determine fantasy sports as legal after the inquiries as to the possibility to define them as gambling.

Stumbling Points

It became known that in June DraftKings and FanDuel had negotiated a potential merger and the investors of both companies were pushing for a tie-up. One of the most disputable questions about this deal is who will be the leader in this entity.

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Another problem is advertising expenses that both companies need to spend. “I don’t know, frankly, whether this market can support two players,” told Adam Krejcik, a principal at Eilers & Krejcik Gaming, a research firm. He also explained that even if the companies could not survive without the merger, they would have to wait. “They’re not going to merge this year. That’s pretty clear,” he told.

Opinion of the Companies

Jason Robinson has already mentioned the idea of a merger in his interviews earlier, and it becomes clear that he is for it. On September, 6th during a Bloomberg TV interview Robins was asked about the merger. “Not next week,” he said. So everything remains unclear as it was in the past.

On the contrary to this, FanDuel Executives do not wish to talk about the possible merger at all. They do not even provide any comments on this matter.

A bit earlier, DraftKings told that they raised $150 mln. in new capital. It was also reported by Fortune that the appraisal in that founding round was significantly smaller than the year before. Jason Robinson refused to talk about the terms of the agreement in the interview with Bloomberg.

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