FanDuel and DraftKings terminate merger

FanDuel co-founders Nigel Eccles, Lesley Eccles and Tom Griffiths

Edinburgh-headquartered FanDuel and Boston-based DraftKings, the two largest daily fantasy sports sites, have terminated their merger agreement.

The decision follows the move by the US Federal Trade Commission (FTC) to authorized legal action to block the merger of the firms.

The FTC had alleged that the combined firm would control more than 90% of the US market for paid daily fantasy sports contests.

The FTC lawsuit was the latest setback for the two firms following regulatory challenges to their business models in several US states.

Analysts had previously placed valuations of more than $1 billion on both firms — but both companies have since been fighting regulators in several US states who have claimed their operations amount to illegal gambling.

The valuations of the firms have fallen by as much as 50%, analysts said.

FanDuel CEO Nigel Eccles said: “FanDuel decided to merge with DraftKings last November, because we believed that this deal would have increased investment in growth and product development thereby benefiting consumers and the greater sports entertainment industry.

“While our opinion has not changed, we have determined that it is in the best interest of our shareholders, customers, employees and partners to terminate the merger agreement and move forward as an independent company.

“There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry.”

DraftKings CEO Jason Robins said: ” … 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.”