DraftKings and FanDuel insist on merger
The biggest fantasy sports companies from the US asked the FTC to allow them to merge, as they believe it’s the best for the industry.
US.- The Federal Trade Commission (FTC) received this week the responses from both DraftKings and FanDuel where they denied that a possible merger would block customers the opportunity and benefits of the direct competition.
The DFS companies believe that the merger actually helps the market since it would result in substantial merger-specific efficiencies, cost-savings, innovation, and other pro competitive effects that would directly increase the consumer value proposition. The FTC released a statement last month where it was detailed that the merger attempted against a free market, as the “combined firms would control more than 90 percent of the US market for paid daily fantasy sports contests.”
The Federal Trade Commission, along with the Offices of the Attorneys General in the District of Columbia and California said that they’re set to jointly file a complaint in federal district court in order to obtain a preliminary injunction to stop the attempts from FanDuel and DraftKings to become one. The companies rejected the resolution and claimed that FTC’s declarations over the size of both companies were misleading and unfortunate.
Moreover, a report by Axios revealed that DraftKings and FanDuel lost US$151 million combined in 2016. The report establishes that DraftKings generated US$160 million in revenue in 2016, and operating loss of US$92 million. On the other hand, FanDuel collected US$91 million during the first ten months of last year, whilst registering US$59 million of earning loss.
