DraftKings and FanDuel won't merge after all

FTC and Two State Attorneys General Challenge Proposed Merger of the Two Largest Daily Fantasy Sports Sites, DraftKings and FanDuel

FTC and Two State Attorneys General Challenge Proposed Merger of the Two Largest Daily Fantasy Sports Sites, DraftKings and FanDuel

In a similar statement, DraftKings CEO Jason Robins cited similar reasons for calling off the merger and said his company has a customer base of almost 8 million people and has grown over 30 percent year-over-year.

Before their attempted merger, both companies were spending large amounts of money in advertising to sway players into joining their site or recruit them from the other.

"The Federal Trade Commission has authorized legal action to block the merger of the two largest daily fantasy sports sites, DraftKings and FanDuel, alleging that the combined firm would control more than 90 percent of the US market for paid daily fantasy sports contests", an FTC statement read. We have a growing customer base of almost 8 million, our revenue is growing over 30% year-over-year, and we are only just beginning to take our product overseas to the billions of global sports fans we have yet to even reach.

By abandoning a deal the companies had contended was critical to their future, DraftKings and FanDuel now return to the familiar - and costly - role of battling each other for the upper hand in the still young daily fantasy sports business.

"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", he said.

The two titans of the daily fantasy sports industry initially agreed to merge in November, opting to join forces as they faced growing concerns about their respective profitability and a slew of legal questions.

"Over the past few years, DraftKings has become the world's leading fantasy sports company".

Both companies enjoyed rapid growth and success within the fantasy marketplace, providing consumers an alternative to season-long fantasy sports.

It's game on between the two biggest players in daily fantasy.

On June 19, the Federal Trade Commission filed a complaint in hopes of blocking the merger of the two DFS giants on antitrust grounds.

Scotland-based FanDuel has raised about $412 million in funding from KKR, Google Capital, Time Warner's Turner Sports, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Pentech Ventures, Piton Capital and Bullpen Capital.

Both companies were losing money as of a year ago, according to figures from an internal merger document published last month by Axios. Robins said DraftKings' revenue has grown almost 40 percent year over year, and he said the company could become profitable right now.

The last nine months had seen an uneasy detente between the companies as they remained rivals preparing to merge. Eccles told Recode he thinks FanDuel can break even next year.

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