A tie-up might be necessary. Regulators in multiple states have been clamping down on daily fantasy businesses, limiting where and how they operate. A merger would let them consolidate and potentially weather the legal storm better than they would on their own. There's no certainty that this would work, or even make financial sense, but it's easy to see the companies deciding that the risks are too great to remain separate.

Update: DraftKings tells us it isn't commenting on the rumors, but adds that these reports have existed since time immemorial. You can read a full statement from the company's Corporate Communications VP Femi Wasserman below.