The two biggest names in daily fantasy sports — FanDuel and DraftKings — are in merger talks, Bloomberg reported Monday.
Scoop – FanDuel and Draft Kings are in merger talks. More in two min on @BloombergTV
— Alex Sherman (@sherman4949) June 13, 2016
According to the report, these talks come following months of pushing from the two company’s investors. After each company was worth more than $1 billion. The companies’ values have quickly dropped due to various state regulators pushing to make the daily fantasy sites illegal.
As of now, DraftKings has stopped accepting payments in 10 different states, and FanDuel has stopped in 10 states. DraftKings has elected to fight Texas’ legislature to keep daily fantasy sports legal, whereas FanDuel decided to stop accepting payments.
The legal battles between these sites and state legislatures have been going on for quite some time now. The most high-profile fight came in New York, where the sites and legislature went back and forth for months. After deciding to back out of those states, the New York legislature is expected to allow the sites to operate in New York, but under new regulations.
Aside from the governmental fights, there has also been trouble with the sports themselves. DraftKings and FanDuel elected to suspend all college sports contests following this year’s NCAA Men’s Basketball Tournament. Besides that, Major League Baseball has threatened to end its partnership with DraftKings, and the NBA has said that the two sites will not be able to advertise on teams’ jerseys.
It’s been a quick fall from grace for these two sites. And though the two sides are still a ways off from a deal, a merger might be the only way to save these sites.