“We believe it is in the best interests of our customers, employees, and investors to terminate our agreement to merge with FanDuel and move forward as a separate company.”
With those words, DraftKings CEO Jason Robins wrote finis to his company’s planned merger with FanDuel, a move that would have smothered the DFS market, giving the mega-company a 90%-plus market share. That was just too much for the Federal Trade Commission, which moved to block the deal.
While DraftKings and FanDuel contended that the combination would create a more efficient industry, the FTC wasn’t buying it, saying the two companies were each other’s only real competitors. Or as Bureau of Competition Acting Director Tad Lipsky said, “This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel.” The attorneys general of California and the District of Columbia shared his sentiments.
Neither company has yet to show a profit. “Perhaps these companies were worried about the information that would be revealed at the preliminary injunction hearing and how that would tarnish their brands,” speculated attorney Rachel Hirsch.
One thing’s for certain, given the abrupt volte-face, faced with adversity, Robins and FanDuel CEO Nigel Eccles decided they’d rather switch than fight.
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