While DraftKings’ shares soared more than 330% in 2020, the stock has struggled in recent months. “While both companies have accomplished much already, this transaction will create a business that can offer a greater variety of offerings, appealing to new users, including the tens of millions of season-long fantasy players that haven’t yet tried our products.DraftKings now operates in 14 states. “Being able to combine DraftKings and FanDuel presents a tremendous opportunity for us to further innovate and disrupt the sports industry,” Eccles said. Unlike their customers, who are at the mercy of a difficult competitive structure, the companies are leveraging the market to make it easier on themselves by removing the competition. It’s easier to simply eliminate the competition and join forces, isn’t it?

Instead of using those millions, and more, to fund saturating advertising campaigns and battle each other in the marketplace, the companies have been forced to spend heavily on lawyers and lobbyists. In October, DraftKings and FanDuel paid a $12 million settlement for false advertising claims brought by New York Attorney General Eric Schneiderman, money that weakened the companies.

We’re building on the momentum created by DFS to remove the federal ban on sports betting.”ĭFS has been criticized because it is very difficult for amateurs to compete against professional players, some of whom play thousands of games at a time. “Fans have a desire to be invested in games. “DraftKings and FanDuel have sped up the debate on legalizing sports betting by demonstrating its popularity and mainstream nature,” Sara Rayme, senior vice president of public affairs for the American Gaming Association said in a statement. The DFS debate has coincided with a push to legalize traditional sports betting. The companies also take 10% of the entry fees with a very small percentage of players actually winning money. Participants pay entry fees to play in daily fantasy games with winners taking home a percentage of the pot.

There had been hot debate for months whether or not DFS was a form of gambling and it has been legalized on a state by state basis over the last year as lawmakers seek legal clarity on the nature of the games. Draft Kings CEO Jason Robins is set to take over as chief executive of the new company.

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