Disclosure: The author consults for a fantasy sports provider that is in current litigation against DraftKings
On Tuesday, the daily fantasy sports operator Fantasy Aces declared for bankruptcy after, according to Legal Sports Report, allegedly co-mingling personal and player funds while lacking the money to pay out their contests' winners.
The demise of the purportedly third largest daily fantasy sports company will have many unintended consequences on the DFS marketplace overall.
Perhaps most notably, it casts further doubt that the proposed FanDuel-DraftKings merger will ever make its way through antitrust scrutiny.
On November 18, 2016, the two largest daily fantasy sports operators DraftKings and FanDuel announced their plans to merge into a single company -- a company that, if consummated, would combine for more than 95% market share in the DFS category.
Since the companies' proposed merger announcement, there has been deafening silence about the proposed deal -- a very clear sign that the deal already posed high antitrust risks in the eyes of regulators.