FanDuel and DraftKings are two of the leading daily fantasy sports companies that continue to face strict opposition from lawmakers and are even banned in some states such as New York. Regardless of the hostile climate toward online daily sports betting sites, the two companies are in talks to merge together.
Reuters, citing "people familiar with the matter," reported that FanDuel and DraftKings are in early-stage talks to combine and create synergies in terms of legal costs and to better lobby for legislation to make their sites legal in states where it has been declared illegal.
Reuters added that a merger could also result in lower advertising budgets at a time when the companies are spending a lot of money to advertise their business. Analysts at Bernstein estimated that 59 percent of all U.S. television advertising revenue growth in the third quarter of 2015 came directly from daily fantasy football advertisements.
However, Reuters cited Andre Barlow, an antitrust expert with a law firm Doyle, Barlow and Mazard PLLC who suggested that a merger of the two market leaders in daily sports betting would likely attract the attention of antitrust authorities and a merger is not guaranteed to result in success.
Finally, while FanDuel declined to comment to Reuters' report, DraftKings said that "these rumors have existed for as long as both companies have been in operation."
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