FanDuel, DraftKings Merger Talks and What it Could Mean

First, I don't have any insider information and this is all opinion and conjecture.

I wasn't pleased by the news that FanDuel and DraftKings may be in merger talks for a number of reasons. Here they are:

1. It doesn't sound like good news for the New York decision due on June 16th. There are already rumblings that it may not get the votes to make it to the Governors desk for signature and if it does, what is his stance? He hasn't revealed what he will do. There have been a number of governors who have pushed back and asked for revisions to bills. They are back in session tomorrow, so that means they have two days to get this done.

Seems like they will have to seriously fast track this bill to get it done. Why would DraftKings be discussing a merger if they felt strongly that NY would come through? Couldn't DK raise money at a strong enough valuation with a positive NY outcome?

2. It's bad for the DFS industry. We need FD and DK to compete and create the strongest products and service. It wouldn't serve the players or the industry to merge into one.

3. Why would this make any sense for DK if they felt they could stay in business? While FanDuel likely has more active players, DK has a healthy market share. I don't see why this would make sense for FanDuel either. They must share a high percentage of the same players.

Thoughts?

I hate the idea and don't know what the benefit would be for either company. Most players play on both sites. It would also likely mean smaller GPPs for players as well. I am interested to see if this would be a big boost to Yahoo.

I'm not a huge fan of these rumors. Honestly, since there's such a huge discrepancy in scoring/pricing, I feel like these two companies offer very different games. What happens to the gameplay if they merge? What sports do they offer, considering DK has a lot more than FD. What scoring emerges from this? DK? FD? Both? Combination? What about legal ramifications since this company could be considered a monopoly. At this point, I just need more information before any further judgement can come forth on my part.

Agreed. Would seem like if they did merge, they would be best served operating separately and maintain their platforms.

Been reading up and it's been reported that DraftKings tried to recently secure a round of funding and failed. That may be the impetus for this approach. The legal fees are starting to take their toll. Also been reading that the merger would have a tough time going through due to anti-trust laws. However, crazier things have hapepned.

I am curious about Yahoo as well Zach. How much would really change if they still served off their own platform? The competition factor would be huge. No small site could push the combination to keep them thriving for the best. Yahoo possibly, but they haven't shown any real threat and I'm not sure the desire is there to do so.

Overall this doesn't look good for NY and if reports are accurate, DK seems desperate. The merger idea for the user seems bad right now with lack of detail. Would be curious to see the plans to make that work. They are two very different sites, and also offer different sports. Users have both accounts but I'm sure a good amount have heavier volume on one over the other. Which would make me wonder what they do if the product they liked changed.