The two companies had faced a lawsuit from the Federal Trade Commission seeking to block the merger.
Daily fantasy sports companies DraftKings and FanDuel have canceled their plans to merge, the companies announced Thursday.
Talk of a merger began in the summer of 2016 and the two companies—the two largest in the DFS industry—first announced their plans to merge in November. The Federal Trade Commission filed a legal challenge to the merger last month, alleging that it would violate antitrust law. The merger would create a DFS monopoly, the FTC argued, by having the same company control in excess of 90% of action in the industry. The companies called off the merger just days after filing briefs in response to the complaint.
“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,” FanDuel CEO Nigel Eccles said in a statement. “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. We’d like to thank our partners and customers for their patience, support and continued loyalty over the past several months.”
For months in 2015, FanDuel and DraftKings battled for control of the exploding DFS industry. The two companies combined to spend three-quarters of a billion dollars to flood every medium imaginable with ads for their services. The ads backfired, though, when they caught the eye of New York attorney general Eric Schneiderman, who filed legal challenges against the companies that resulted in them being temporarily shut down in the state. The cash eventually started to run out, necessitating the merger.