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Daily fantasy sites DraftKings and FanDuel announce merger

By Casey Pazzalia

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)
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) /
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Two daily fantasy sports (DFS) heavyweights announce merger.

According to CNBC, daily fantasy icon FanDuel has announced a merger with its biggest competitor, DraftKings.

The two companies have been in talks for months and have finally reached an agreement.

Per documents distributed to the company’s investors, DraftKings CEO Jason Robbins will retain his title of the combined company. FanDuel CEO Nigel Eccles will also stay on board as chairman of the new site. According to Yahoo Finance, the two companies involved hold an estimated 96 percent of the market share.

Daily Fantasy has grown to be popular in the past few years. The product was fun and advertisements were everywhere. According to aYahoo Finance report, FanDuel and DraftKings brought in a combined $3 billion in entry fees during 2015.

DraftKings and FanDuel both have business ties to professional sports. DraftKings is partially owned by Patriots owner Robert Kraft and Cowboys owner Jerry Jones. Their commercials also feature Patriots tight end Rob Gronkowski and Texans wide receiver DeAndre Hopkins.

In 2014, Sports Business Daily reported a four year partnership between FanDuel and the NBA. The deal made FanDuel the NBA’s exclusive daily fantasy site and also gave the NBA an equity stake in the company.

Both companies have faced legal issues in the past. Yahoo Finance reported that there are still 10 states in which FanDuel and DraftKings cannot operate in. In addition, DraftKings currently serves Texas but FanDuel does not.

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Per an Outside the Lines report, both companies are in financial trouble due to legal fees, over advertising, and mismanagement. In 2015, they companies combined to spend more money on advertisements than every American beer company combined.