Paddy Power Betfair To Merge With FanDuel In Play For U.S. Sports Betting MarketDeal Expected To Close Later This Year |
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The U.S. arm of international online gambling firm Paddy Power Betfair has reached a deal to merge with daily fantasy sports giant FanDuel, according to a news release.
The groups said the combined company will create the “largest online sports destination in the United States.” The U.S. sports betting market is estimated to reach between $4 billion and $6 billion within the next five years.
PPB will have 61 percent of the combined company, while FanDuel investors will own 39 percent. The deal is worth more than $750 million. PPB has the option to increase its stake to 80 percent after three years and 100 percent after five years.
The Dublin-based PPB is approved for online gambling in New Jersey, a state that is expected to be one of the first to launch sports betting thanks to last week’s Supreme Court ruling. Merging with FanDuel gives PPB access to the DFS site’s seven million registered customers (1.3 million active). FanDuel has more than 40 percent of the DFS market, with DraftKings controlling nearly all of the rest. FanDuel and DraftKings were once close to a merger of their own.
“The combined business is incredibly well-positioned to capitalize on the sports betting market opportunity in the United States,” the groups said in a press release.
“We are excited to add FanDuel to the [our] portfolio of leading sports brands," said Peter Jackson, PPB CEO. "This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint. The Group has leading sports betting operating capabilities globally and strong operations on the ground in the US.”
According to PPB, FanDuel has spent $400 million to date on its brand awareness. After the Supreme Court ruling, FanDuel said that it’s “a business that makes sports more exciting.” It added: “In the same way we revolutionized fantasy sports, we will bring innovation to the sports betting space.” The firm also touted its customer database.
FanDuel CEO Matt King remarked on the deal: “FanDuel and Betfair US share an enthusiasm for innovation and […] are prepared to lead the charge into the US sports betting market. The combination of our brands and team, along with a shared culture and vision for the future, will allow us to create the leading gaming destination for sports fans everywhere.”
The transaction is subject to customary closing conditions and regulatory approvals and is expected to be completed in the third quarter of 2018.
The deal is PPB’s second foray into the daily fantasy sports space. In 2017, the Irish firm bought the platform Draft for nearly $50 million.
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