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[Skellig Gra]

Two major daily fantasy sports sites, DraftKings Inc. and FanDuel Inc., said they have agreed to set aside years of bitter rivalry and become one as they face down continuing regulatory and legal challenges to their industry.

The two companies, which together spent upward of $500 million on advertising last year to try to build unique brands, had been talking about merging for months, with those talks accelerating in the last few weeks.

Neither company has figured out a business plan to become profitable. They both cut back significantly on advertising during the current football season as legal and lobbying bills have stacked up, painting a bleak financial picture, according to insiders and analysts.

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[bigkrev]

There is a hell of a textbook to be written on the marketing that Draftkings and Fanduel did, and how it killed them.

 

[XiaNaphryz]

From Deadspin's piece on this:

http://deadspin.com/draftkings-and-fanduel-finally-agree-to-merge-still-fa-1789136857

The two companies together will control somewhere north of 90 percent of the daily fantasy market, making it a natural antitrust target of the Department of Justice or Federal Trade Commission.

Law360 talked to a number of antitrust experts, most of whom believe the DOJ or FTC will scrutinize the merger heavily, as it hurts consumers and would make it more difficult for new daily fantasy companies to join the market. But as important is whether those federal agencies will give a shit. They have limited resources, and scrutinizing the operations of two companies who will likely go belly up without the merger might not be where they choose to spend them.

Neither of the companies are profitable, and both have incurred heavy operating costs in the past year, as they spent tens of millions of dollars on ads in an attempt to corner the market, and their legal fees skyrocketed as numerous state attorneys general went after them for deceiving customers and/or being thinly disguised sports gambling operations.

The real loser here are the companies’ investors. Combined, they’ve poured about a billion dollars into the two companies, in the hopes that one would emerge dominant and garner a huge return. Instead, the two companies used those investments to bludgeon each other close to death while also inviting regulatory scrutiny, and if approved, the merger will see each investor holding a smaller share of a still-listing company. But at least it’s something!

 

[The Albatross]

I was into daily fantasy football a couple years ago, but cut back last year and have totally cut back this year, not playing at all. I'm glad the ads are pretty much gone, and like other posters have said, it's a master class in how too much marketing can be really bad.

When you're playing against somebody's algorithm that plays 10,000 games and tries to win 52% of them, it takes any interest out of it for people like me, who go into a season expecting to lose $20 or $30.

I used to really enjoy it too, and I never really won or lost, would usually end up either breaking even or being down $10 or something over the course of the season. But it always followed a predictable pattern, with more losses towards the end of the season as (I figure) "normal people" would stop playing, and then you'd be more likely to face someone just playing the odds with 10,000 games a weekend.