Gambling operator Paddy Power Betfair has signed a definitive agreement with daily fantasy sports (DFS) operator FanDuel that will lead to the two companies merging their US businesses.
The move will combine FanDuel’s brand with Betfair US’s existing horse-racing betting network and media business, TVG, and its online casino business in New Jersey.
The deal has been signed after the US Supreme Court earlier this month ruled in favour of New Jersey in its bid to overturn the 1992 Professional and Amateur Sports Protection Act (PASPA) and allow states outside of Nevada to legalise sports betting.
Financial terms of the agreement between PPB and FanDuel were not disclosed but the BBC reported that PPB will contribute its existing US assets, which are worth $612m (€522m), along with $158m in cash to take a 61-per-cent stake in the combined business.
The merged entity will invest in developing new products for consumers, along with an expanded workforce and other growth opportunities. FanDuel said the entity will also seek new ways to drive revenue synergies, including cross-selling and integrating aspects of the companies’ digital products.
PPB chief executive Peter Jackson said: “We are excited to add FanDuel to the group’s portfolio of leading sports brands. 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. Together with our substantial financial firepower, we believe we are now exceptionally well placed to target the prospective US sport betting opportunity.”
FanDuel chief executive Matt King added: “FanDuel and Betfair US share an enthusiasm for innovation and, as a result of today’s announcement, 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 by the third quarter of 2018.