On July 13th, DraftKings & FanDuel announced that they have terminated their proposed merger, and are withdrawing litigation from the Federal Trade Commission (FTC).  Both sites sent out messages to their users informing them of this, stating that the user experience will not change.  DraftKings stated “We want to reassure you that you will not notice any changes to your account or your experience with us as a result of this decision. We will continue to offer best-in-class contests, prizes, and offerings to our players. We will continue to focus our resources and expertise on enhancing our products and features so we can deliver the exceptional sports entertainment experience you have always had and love with DraftKings.”

While it would have been interesting to see how the merger would have looked once finished, the termination of it ensures the DFS community that there will continue to be two DFS sites that hold large entry and prize pool tournaments on a daily to weekly basis. This will also make those excited to see them compete for the best live final, and user experience contests.  Although there is no official word, there are reports that both sites will need to have another round of funding in order to maximize on the upcoming NFL season.  Reports are that FanDuel will ask for close to $100 million through a cash call round with their investors, while DraftKings may open up a new round of funding of their own.  Stay tuned for any new developments.

 

My thoughts on this news: 

Both DraftKings & FanDuel need more funding to stay afloat, and obtain maximum exposure to gain new users for the NFL season.  I believe they will have no problem obtaining the new funding.  What we’ve seen happen in the past is the smaller sites trying to drive some of those new users to their sites through targeted promotions and  nice deposit bonuses.  The hope is that once the industry becomes regulated, funding for smaller sites will become available again, or they will be bought-out themselves.  Always remember that a $100 deposit bonus at a 4% drip means you have to play $2,500 to receive your full bonus (Some sites have expiration dates on bonus $ as well).

There has been at least one site in each of the past two seasons that needed a bailout to save the industry, while many others have closed their doors on their own terms before reaching that negligent point.  Hopefully, clear pieces of regulation will avoid this from taking place again.