DraftKings and FanDuel grow before possible merger
The DFS providers are generating more than seven figures a week whilst in serious talks about a possible merger.
US.- DraftKings and FanDuel, the companies that could announce a merger this week and take over the US DFS market, showed positive numbers in the last couple of weeks. Both guaranteed prize pools (GPP) and non-guaranteed “cash games.”
Whilst the companies didn’t announce the numbers, which don’t include all NFL contests, they show how much money the operators are generating. FanDuel received US$15 million in entry fees, whilst US$13 million in prizes awarded and US$2 million in revenues. On the other hand, DraftKings earned over US$20 million in entry fees, and only in the last week they awarded prizes of US$18.9 million and US$1.8 million in revenues earned.
Last month, the DFS giants settled an agreement with the State of New York for US$6 million dollars each, ending the legal investigation for seeming false advertising and consumer fraud. Even if they do agree on a merger, the companies would have to consider multiple reforms in order to meet both the regulatory measures and the officials’ demands. A possible merger would certainly bring a legal hurdle from the Department of Justice and the Federal Trade Commission. In 2010, they said that any potential merger between the companies would “substantially lessen competition, or even create a monopoly.”