Daily Fantasy Sports Competitors DraftKings and FanDuel Agree to Merge

We're excited to announce that DraftKings and FanDuel have reached a merger agreement! Read more: https://t.co/KmG1DjJLOd pic.twitter.com/50jDDu3EBK
— DraftKings (@DraftKings) November 18, 2016

Rival daily fantasy sports (DFS) companies FanDuel and DraftKings announced today that they have decided to merge, putting an end to a corporate rivalry that has lasted since DraftKings launched in 2012.

The merger would allow the companies to consolidate costs and pool resources to better battle regulators who have ruled the sites as an illegal form of gambling. Over the past year and a half, both companies have encountered setbacks, as the multi-billion-dollar DFS industry's legality was called into question by multiple state Attorneys General, and outright banned in some states. According to ESPN's DFS legalization tracker, daily fantasy has been recently contested in ten states, and lawmakers have introduced legislation in 13 others.

FanDuel and DraftKings framed the merger as an investment in "growth opportunities and an accelerated path to profitability."

"We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform," DraftKings CEO Jason Robins said in a statement. "Joining forces will allow us to truly realize the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately."

While the merger may help leverage funds to lobby policymakers, investors will likely see the merger as a setback, as they have been betting for the success of one company over the other for the past few years.

The merger by DraftKings and FanDuel is a sad reality to some of their biggest investors who banked on 1 of them being a winner.
— Darren Rovell (@darrenrovell) November 18, 2016

The merger still requires federal approval, but the companies have projected that the deal will be finalized in 2017. Robbins is set to take over as chief executive of the new company, expected to have headquarters in both Boston and New York.