FanDuel and DraftKings believed the merger could help them weather their shared, mounting financial woes, while tackling a perilous regulatory environment that at times resulted in stiff fines.
In a statement, FanDuel CEO Nigel Eccles said: “in the best interest of our shareholders, customers, employees, and partners to terminate the merger agreement and move forward as an independent company.”
DraftKings, meanwhile, confirmed its decision to drop the deal, while touting its future prospects. “We have a growing customer base of nearly 8 million, our revenue is growing over 30 percent year-over-year, and we are only just beginning to take our product overseas to the billions of international sports fans we have yet to even reach,” said its chief executive, Jason Robbins, in a statement.
U.S. Federal Trade Commission decided to block the deal and said it was concerned over how the deal could impact competition in the US DFS sector, forecasting that the combined company would control over 90% of the domestic market. However, both companies claimed they serve a much broader marketplace, not just daily fantasy sports but weekly and yearly contests, including more casual leagues offered by sites like ESPN and Yahoo.