The companies originally announced their intent to merge in November 2016, in a bid to pool their resources to try to become a bigger powerhouse in the fast-growing daily fantasy-sports segments.
According to the FTC’s lawsuit seeking to block the merger, DraftKings and FanDuel are each other’s most significant competitor, and together would control more than 90% of the U.S. market for paid daily fantasy sports contests.
FanDuel CEO Nigel Eccles said in a statement released Thursday: “FanDuel decided to merge with DraftKings last November, because we believed that this deal would have increased investment in growth and product development thereby benefiting consumers and the greater sports entertainment industry. While our opinion has not changed, we have determined that it is in the best interest of our shareholders, customers, employees and partners to terminate the merger agreement and move forward as an independent company.”
Eccles added, “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.”
DraftKings and FanDuel have steadfastly insisted that their daily gaming contests do not represent gambling activity, but both companies have faced regulatory restrictions in numerous states.
DraftKings, founded in 2012 and based in Boston, has raised about $600 million to date. Investors including 21st Century Fox’s Fox Sports, Revolution Growth, Major League Baseball, the National Hockey League, Major League Soccer, the Madison Square Garden Co., the Kraft Group, the Raine Group and Wellington Management Co.
Scotland-based FanDuel has raised about $412 million in funding from KKR, Google Capital, Time Warner’s Turner Sports, Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Pentech Ventures, Piton Capital and Bullpen Capital.