Paddy Power agrees merger of US unit with FanDuel sports site
Firm will own 61% of combined business after contributing its US assets and €135m of cash
‘We are excited to add FanDuel to the group’s portfolio of leading sports brands,’ Peter Jackson, chief executive officer of Paddy Power, said. Photograph: PA
Paddy Power Betfair has agreed to merge its US unit with website FanDuel, as the Irish bookmaker seeks to gain from an expected rise in sports betting following a US supreme court ruling this month which legalises sports gambling in all states.
Paddy Power will own 61 per cent of the combined business after contributing its US assets and $158 million (€135 million) of cash, the Dublin-based company said on Wednesday. That ownership could increase to 80 per cent after three years and 100 per cent after five years through call and put options. “We are excited to add FanDuel to the group’s portfolio of leading sports brands,” Peter Jackson, chief executive officer of Paddy Power, said.
“This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint.”
It’s the first of a possible wave of deals involving betting companies in the US after a supreme court decision on May 14th that struck down the federal law which had barred single-game gambling in most of the country.
Shares of US casino companies and bookmakers rallied on anticipation of the decision, which means that sports betting could begin in a matter of weeks in casinos and racetracks in New Jersey, the state that had instigated the legal fight to introduce sports betting.
New York-based FanDuel has a more than 40 per cent share of the US daily fantasy sports market, according to Paddy Power. “Together with our substantial financial firepower, we believe we are now well placed to target the prospective US sports betting opportunity,” Mr Jackson said.