FanDuel and DraftKings ‘short of cash’ – report

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

Edinburgh and Manhattan-based fantasy sports operator FanDuel and rival DraftKings are close to agreeing a settlement with New York’s attorney general over claims they engaged in false advertising, according to a report in The New York Times.

The agreement with attorney general Eric Schneiderman could cost the companies a total of between $8 million and $12 million, the report claimed.

However, the newspaper claimed that DraftKings and FanDuel are so short of cash that they have asked Schneiderman’s office if they can pay the final settlement in installments, and they have admitted that they are having difficulty meeting their day-to-day obligations.

Some executives at both companies have concluded that the market cannot sustain both firms and that they will need to merge.

The report claimed that FanDuel laid off more than 60 people in recent weeks and that both companies have acknowledged that they are months behind in their payments to vendors, especially to public relations and lobbying firms that they have employed to persuade individual state legislatures to legalize daily fantasy games.

Justine Sacco, a spokeswoman for FanDuel, told the newspaper: “While we cannot comment on the details, we can confirm that we have been in ongoing settlement negotiations with the New York attorney general’s office.

“They have been tough but fair, and we hope to reach an acceptable resolution.”