FanDuel Future in Doubt, Auditors Warn
- Deloitte says there is “material uncertainty that casts significant doubt on FanDuel’s future"
- Losses rocketed to $94m over past year
- International platform “nearing completion” with UK market entry to happen soon
- ”We believe in our strategy” CEO Nigel Eccles assures
One of Britain’s biggest technology start-ups may not be able to survive the current crackdown on the Daily Fantasy Sports sector.
The regulatory blitz has left fantasy sports site FanDuel facing a material uncertainty that casts “significant doubt” on its future, according to Deloitte.
“The potential for such an outcome represents a material uncertainty that casts significant doubt on [FanDuel’s] ability to continue as a going concern,” said James Boyle, senior statutory authority, Deloitte.
Three US states, including two of the more populous – Texas and New York – have ordered FanDuel and its chief competitor DraftKings to cease doing business there. Nevada’s Gaming Commission has also demanded the exit of FanDuel and DraftKings. Both companies have complied with all orders.
The two have been subjected to various class action lawsuits as well.
All of this turmoil has resulted in FanDuel’s cash infusions drying up ahead of the critical 2016 NFL season.
FanDuel’s losses rocketed to $94m over the past year with its cash balance reduced from $274m to $47.8m.
The Daily Fantasy Sports kingpin’s paid active player base now stands at 1.25 million compared to 250,000 just two-and-a-half-years ago.
Chief executive Nigel Eccles told the Herald of Scotland FanDuel was “nearing completion” on its international product and planned to enter the United Kingdom market soon.
“Despite the legal and regulatory challenges, we believe in our strategy… and believe we can continue growing headcount, paid active players, turnover and profitability in the coming period, and beyond,” Eccles told the Herald.
- Aaron Goldstein, Gambling911.com
