FanDuel-DraftKings merger: What it means for daily fantasy betting

CHICAGO, IL - OCTOBER 16: The fantasy sports website DraftKings is shown on October 16, 2015 in Chicago, Illinois. DraftKings and its rival FanDuel have been under scrutiny after accusations surfaced of employees participating in the contests with insider information. An employee recently finished second in a contest on FanDuel, winning $350,000. Nevada recently banned the sites. (Photo illustration by Scott Olson/Getty Images) /

FanDuel and DraftKings announced Friday that it will form a merger between the two powerhouses, essentially forming a monopoly within the fastest growing subset of the sports gambling industry.

So what will this mean for the future of daily fantasy sports betting?

According to SportsBookReview, while both companies are chalking this up as a positive move for the advancement of paid fantasy sports, the timing of this decision does lead to speculation of a declining industry.

Like most casinos and sportsbooks, DraftKings and FanDuel have always relied on the NFL season to be their most profitable season of the calendar year. However, the league has seen viewership reportedly down 14 percent heading into Week 9.

Similarly, the Nevada Gaming Commission has reported year over year decline in overall betting action, coming in $6 million short when comparing 2015’s and 2016’s year-to-date earnings—with pro football as the main culprit.

Add that to last year’s scandal, which involved employees using inside information to turn the game in their favor at competing platforms, and it found both sites in a precarious situation.

“I feel this merger and reorganization of sorts is only going to help keep the conversation of legal sports betting across the United States alive,” said Peter Kahn, sports betting expert and president of Hardwired Marketing Group. “However, there’s still no guarantee that daily fantasy will be sustainable. Only time will tell.”

While standard regulatory approval remains pending, the FanDuel and DraftKings will join forces before the 2017 football season kicks off. There has been no announcement yet as to which brand name the company will take on.

Next: FanDuel and DraftKings announce merger

An estimated five million players participate in daily fantasy contests (compared to 40 million who partake in season-long fantasy competitions), often satiating an appeal for those in search of instant gratification. The merger may allow both companies to find ways to tap into the season-long player who has yet to test their product.