January 19, 2019

Paddy Power Betfair declares interest in FanDuel

17 May 2018, 03:00 | Joann Bryant

Gambling site Nigel Eccles

Gambling site Nigel Eccles

Paddy Power Betfair PPB.I PPB.L is considering merging its USA business with fantasy sports company FanDuel to target the US sports betting market, the Irish bookmaker said on Wednesday.

"Discussions are ongoing and there is no certainty as to whether agreement will be reached, or as to the terms or timing of any transaction".

FanDuel previously stated its intention to launch a sports betting service should the Supreme Court overturn the federal 1992 Professional and Amateur Sports Protection Act (PASPA), which has blocked more states from offering regulated sports betting.

In early morning trading, Paddy Power shares gained 0.8% at 7,825p.

Companies such as Paddy Power are looking for growth opportunities to offset the increasing cost of regulation in established markets such as Britain and Australia. New Jersey is among the states expected to enact legislation within weeks.

Paddy Power already has a US-based operation, TVG, the largest online horse racing business in the USA, with account holders in thirty-five states and a TV channel, as well as an online casino and horse racing betting exchange in New Jersey.

On the other hand, the daily fantasy sports options provider FanDuel would also benefit from a possible merger, as it would be able to consolidate its presence on the local market.

FanDuel grew to become one of two Scots unicorns, with a $1 billion valuation, alongside Skyscanner.

With five million users, Paddy Power Betfair is a powerhouse in the sports betting world.

The Dublin-based gambling company said yesterday that talks with Fanduel had begun after a US Supreme Court ruling on Monday made it possible for states to legalise sports gambling. The deal would "create a combined business to target the prospective USA sports betting market".

Analysts at Davy Stockbrokers said the deal would hand Paddy Power Betfair an extremely well recognised USA brand, an award-winning technology platform that can be converted to offer real money betting and a database of over 6 million US customers.

Such websites have slipped through the net of the United States ban on sports betting because they are seen as games of skill rather than of chance but an alliance would help Paddy Power push betting products through the site.

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