https://www.ft.com/content/2bbcabfa-5ea6-11e8-ad91-e01af256df68
Paddy Power Betfair has reached a deal to acquire fantasy sports site FanDuel, as the UK and Ireland-based bookmaker looks to capitalise on the sudden lifting of a federal ban of sports betting across the United States.
The FTSE 100 gambling group said on Wednesday that it will combine the US assets of its Betfair brand with New York-based FanDuel, as well as provide a further $158m in cash.
The cash element will allow FanDuel to pay down its existing debt of $76m.
On completion, Paddy Power Betfair will own 61 per cent of the combined business and take operational control, with existing FanDuel shareholders taking the remaining 39 per cent.
A further mechanism has been agreed that allows the bookmaker to progressively take more shares in the US business over time, and could potentially own the whole entity outright after five years.
Media reports prompted the groups to reveal the acquisition talks last week, with the combined business intended to target the prospective US sports betting market. The deal is expected to be completed by the end of this year.
“This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint,” said Peter Jackson, chief executive of Paddy Power Betfair.
Matt King, chief executive of FanDuel, said the deal will create “the leading gaming destination for US sports fans.”
People close to the bookmaker have said Paddy Power Betfair has been talking to American gambling groups for weeks over potential deals and partnerships, in anticipation of a US Supreme Court decision delivered last week that struck down a federal law against sports betting.
The move paves the way for individual states to legalise the practice, with New Jersey and Delaware among those expected to enact legislation within weeks.
Barclays estimates the US gambling market could be worth $10bn in net revenues to gambling operators, a figure that excludes money given back to punters in prizes.
Paddy Power Betfair operates an online casino in New Jersey, and last year paid $48m to acquire DRAFT, a US daily fantasy sports site.
In response to this week’s Supreme Court judgment, Draft Kings, the Boston-based fantasy sports provider, said it would also enter the sports betting market.
Last year, FanDuel and DraftKings were forced to call off plans for a merger, after the Federal Trade Commission, the US competition watchdog, signalled its opposition to a deal that would have given the combined company a 90 per cent share of the American market for daily fantasy sports wagers.
FanDuel was founded in 2009. It allows players to engage in online contests where they can pick fantasy sports teams and play against each other for cash prizes.
Paddy Power Betfair is searching for growth after reporting declining sales and underlying profits last month in the face of a tougher regulatory environment in its main UK and Australian markets.
Paddy Power Betfair has reached a deal to acquire fantasy sports site FanDuel, as the UK and Ireland-based bookmaker looks to capitalise on the sudden lifting of a federal ban of sports betting across the United States.
The FTSE 100 gambling group said on Wednesday that it will combine the US assets of its Betfair brand with New York-based FanDuel, as well as provide a further $158m in cash.
The cash element will allow FanDuel to pay down its existing debt of $76m.
On completion, Paddy Power Betfair will own 61 per cent of the combined business and take operational control, with existing FanDuel shareholders taking the remaining 39 per cent.
A further mechanism has been agreed that allows the bookmaker to progressively take more shares in the US business over time, and could potentially own the whole entity outright after five years.
Media reports prompted the groups to reveal the acquisition talks last week, with the combined business intended to target the prospective US sports betting market. The deal is expected to be completed by the end of this year.
“This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint,” said Peter Jackson, chief executive of Paddy Power Betfair.
Matt King, chief executive of FanDuel, said the deal will create “the leading gaming destination for US sports fans.”
People close to the bookmaker have said Paddy Power Betfair has been talking to American gambling groups for weeks over potential deals and partnerships, in anticipation of a US Supreme Court decision delivered last week that struck down a federal law against sports betting.
The move paves the way for individual states to legalise the practice, with New Jersey and Delaware among those expected to enact legislation within weeks.
Barclays estimates the US gambling market could be worth $10bn in net revenues to gambling operators, a figure that excludes money given back to punters in prizes.
Paddy Power Betfair operates an online casino in New Jersey, and last year paid $48m to acquire DRAFT, a US daily fantasy sports site.
In response to this week’s Supreme Court judgment, Draft Kings, the Boston-based fantasy sports provider, said it would also enter the sports betting market.
Last year, FanDuel and DraftKings were forced to call off plans for a merger, after the Federal Trade Commission, the US competition watchdog, signalled its opposition to a deal that would have given the combined company a 90 per cent share of the American market for daily fantasy sports wagers.
FanDuel was founded in 2009. It allows players to engage in online contests where they can pick fantasy sports teams and play against each other for cash prizes.
Paddy Power Betfair is searching for growth after reporting declining sales and underlying profits last month in the face of a tougher regulatory environment in its main UK and Australian markets.
