Paddy Power Betfair Acquires Fanduel

Gambling firm Paddy Power Betfair has agreed to merge with the US fantasy sports betting site FanDuel, in the first deal since the US Supreme Court overturned 1992 legislation banning sports betting in most states, earlier this month.

The move will see UK-based Paddy Power Betfair target the US sports betting market that is now set to open up following the court decision.

FanDuel, which was founded in Scotland, allows sports fans to gamble on fantasy sports leagues and contests in American sports, including NFL, NBA, MLB and NHL.

There are an estimated 30 million adult fantasy sports players in North America. On FanDuel, users pick fantasy sports teams using a fantasy budget, and play head-to-head or multi-player contests online, with players paying an entry fee for each contest and compete for cash prizes.

Under the agreement, Paddy Power Betfair will throw in its existing US assets worth $612m along with $158m of cash to take a 61% stake in the combined business. Existing Fan Duel investors will own the remaining 39%, however, Paddy Power can increase its stake in FanDuel to 80% after three years and 100% after five years.

The Dublin-based company will control the business, which will become a subsidiary.

Paddy Power Betfair chief executive Peter Jackson said in a statement: “This combination creates the industry’s largest online business in the U.S., with a large sports-focused customer base and an extensive nationwide footprint.

“Together with our substantial financial firepower, we believe we are now well placed to target the prospective U.S. sports betting opportunity.”

Paddy Power Betfair entered the US fantasy sports market last year with the acquisition of Draft, a US fantasy sports site, for $48m (£35m), and already has a US division, which includes the TVG Network, a horseracing TV channel and an online betting network which is active in 35 states.

Paddy Power also has an online casino and a horseracing betting exchange in the state of New Jersey.