Fantasy Giants FanDuel & DraftKings Considering Merger

With the future of fantasy sports increasingly uncertain, two industry giants are considering combining their efforts. According to Bloomberg, FanDuel Inc. and DraftKings Inc. are currently in talks about a billion dollar merger.

This time last year both companies were each valued at over $1 billion, but a sudden regulatory crackdown has already cut those valuations in half. While those in the industry maintain fantasy sports are a game of skill, and therefore not subject to gambling regulations, many state governments have not been swayed by their argument.

To date DraftKings has already ceased paid game operations in nine states, FanDuel in 10. The biggest loss among them was New York—both companies agreed to stop paid competition until the state legislature passes regulations that will ultimately clear the way to resume operation, albeit with far more government oversight.

At this point nothing between FanDuel and DraftKings has been finalized, “and the deal may still fall apart,” but a merger certainly makes sense on the surface—the battles they have a head are too big to be wasting their resources fighting each other for market share.