The two largest daily fantasy sports companies, FanDuel Inc and DraftKings Inc, are in early-stage talks to merge, people familiar with the matter said on Monday, as the industry faces a crackdown by U.S. states over whether it runs illegal gambling.
A deal could reduce legal costs for the two companies, which have had to defend themselves against the legal challenges as well as lobby for legislation to make the games legal in states that have declared them illegal gambling.
It could also lower their advertising budgets. The companies have spent aggressively against each other in the past few years as they battled for market share.