Fantasy sports technology outfits FanDuel and DraftKings have entered into a merger agreement which is expected to close in the new year.
Edinburgh-founded FanDuel has grown to become a technology “unicorn”, with a $1 billion valuation, but has been dented by mounting legal and regulatory pressures in its core US market.
Stateside peer DraftKings has also faced accusations that its daily competitions amount to gambling, rather than a game of skill.
FanDuel, which was co-founded by five entrepreneurs including chief executive Nigel Eccles and his wife Lesley, said today that financial terms were not disclosed.
The two firms said that the merger would “bring together two fantasy sports innovators to better serve consumers”.
Operational efficiencies and cost savings from the tie-up will drive “a greater focus on developing new products and features”, the pair added. The combined company will be co-headquartered in New York and Boston.
At the close of the deal, DraftKings chief executive Jason Robins will become chief executive of the newly combined company and FanDuel boss Nigel Eccles will become chairman of the board.
In addition to the chairman and chief executive, the board will be composed of three directors from DraftKings, three directors from FanDuel and one independent director.
News of the merger agreement follows speculation of a possible tie-up between the two companies.
Robins said: “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.
“Joining forces will allow us to truly realise 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.”
Eccles added: “While both companies have accomplished much already, this transaction will create a business that can offer a greater variety of offerings, appealing to new users, including the tens of millions of season-long fantasy players that haven’t yet tried our products.”