Paddy Power Buys 61% of FanDuel Shares
In the latest international iGaming news British bookmaker Paddy Power Betfair has entered into an official deal to acquire leading American daily fantasy sports supplier FanDuel. The deal was reportedly confirmed on the London market earlier this week. FanDuel is one of the two largest DFS operators in the US market, alongside its competitor DraftKings. Now, FanDuel will be merged with Paddy Power’s own Betfair US operations in a bid to target the potentially lucrative US sports betting industry. The move follows the abolishment of the federal ban on real money sports betting by the Supreme Court last week.
Cash Payment to Pay Off Debts
Paddy Power Betfair will plough all of its existing assets in the USA into the deal, along with $158 million in cash to gain a 61% share of FanDuel’s business. FanDuel’s investors will retain the other 39% of the shares in the company. A private ‘mechanism’ has also been agreed upon to increase Paddy Power’s ownership to 80% after three years, and to a full 100% after five years. The UK bookie’s main source of revenue in the USA is horse racing television and betting network TVG. The brand also operates an online casino exclusive to the state of New Jersey, as well as an up-and-coming daily fantasy sports business, Draft DFS. The cash part of the consideration will be used to pay off FanDuel’s current debts, which stood at over $76 million at the end of March this year. It will furthermore also supply working capital to the merged American business of Betfair and FanDuel.
CEOs Comment on the Agreement
CEO of Paddy Power Betfair, Peter Jackson, has noted that his company is excited to be adding FanDuel to its portfolio of popular sports betting brands. Jackson also added that this combination will create the US industry’s largest online betting business, with a major focus on sports-based platforms and a widespread national presence. FanDuel CEO Matt King also commented on the deal, noting that the fusion of brands and teams, as well as a shared vision for the business’s future, will create a top quality gaming destination for sports fans in America. FanDuel currently has over 40% of the DFS market share locally, according to Paddy Power, with 7 million registered players across 40 US states. Last year, the firm earned revenues of $124 million. More recently, Paddy Power has also noted that the FanDuel brand has been created using a spend of around $400 million to date, which has been supported by the firm’s cutting-edge proprietary technology. The transaction is set to be completed in the third quarter of this year once it has gained the necessary regulatory approval.