Amid antitrust concerns, fantasy sports sites call off merger

Fantasy sports websites DraftKings and FanDuel announced Thursday they were calling off their planned merger, following opposition from US antitrust regulators.

Last month, the Federal Trade Commission sued to block the deal, arguing the merger would allow a single operator to control more than 90 percent of the US market for paid daily fantasy sports contests.

DraftKings chief executive Jason Robins said that in light of the developments, "we believe it is in the best interests of our customers, employees, and investors to terminate our agreement to merge with FanDuel and move forward as a separate company."

FanDuel CEO Nigel Eccles issued a similar statement, saying his company was ready to move forward on its own.

"There is still enormous, untapped market opportunity for FanDuel, and we will continue to execute our strategy to grow our business and further expand the fantasy sports industry," he said.

The planned tie-up announced last year had been described as a merger of equals.

The fantasy sports industry estimates some 57 million participants in the United States and Canada, with the average user spending some $556 annually.

Fantasy sports competitions give die-hard fans a chance to field their own teams in virtual matches for huge payoffs, sometimes topping $1 million.

Participants create teams by choosing players from a real-world sports league like the US National Basketball Association, the National Football League or England's Premier League.

The industry has faced challenges from some states which claim fantasy sports amounts to illegal gambling.

New York's state legislature, however, approved a bill last year that allows fantasy sports operations in the state, averting a major crisis for the firms.

Source: AFP