The fantasy sports industry is about to have a major shakeup. One of the largest fantasy sports betting companies is about to go public. DraftKings will do so next year through a $3.3-billion merger with two other firms.
This news comes more than two years after the online sports gaming company had to cancel plans to merge with FanDuel, another major daily fantasy sports company after the Federal Trade Commission sued to stop the deal. “The two companies controlled 90 percent of the paid daily fantasy sports market, the FTC said at the time,” USA Today reported.
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DraftKings, which offers daily fantasy sports contests and sports betting, allows users to enter daily and weekly fantasy sports-related contests. Players can win money based on individual player and team performances in five major American sports (MLB, the NHL, the NFL, the NBA, and the PGA), Premier League and UEFA Champions League soccer, NASCAR, Canadian Football League, the Arena Football League, Mixed Martial Arts, as well as Tennis. The company’s online and retail sports betting is currently operating in seven states.
“DraftKings will combine with Diamond Eagle Acquisition Corp., a blank-check company that is already publicly traded, and gaming technology firm SBTech to create the nation’s only vertically integrated ‘pure-play’ sports betting and online gaming firm, according to a press release,” NY Post reported.
“With the full integration of SBTech’s technology and innovative product expertise coupled with the right capitalization, DraftKings will be in a great position to continue its ambitious expansion plans in the United States,” Harry E. Sloan, Diamond Eagle’s founding investor, said in a statement.
According to DraftKings, it has a 60 percent market share for daily fantasy sports and the combined company will be valued at $3.3 billion, and it will have $500 million on hand once the deal is complete.
“The three companies are merging through a special purpose acquisition, a method of taking a company public that differs from the more familiar initial public offering, or IPO, process,” USA Today reported.
