Paddy Power Announces Merger with FanDuel
Recently, it was reported that the UK bookmaker, Paddy Power, was looking into acquiring FanDuel. FanDuel is one of the largest providers of Daily Fantasy Sports in the United States. Paddy Power was looking into acquiring it, following the Supreme Court’s decision to repeal the federal ban on sports betting.
The repeal will allow states to decide if they want to legalize sports betting and it has already been indicated that numerous states will do so in the near future. The official announcement happened earlier this week, following rumors of a potential deal, with the merger between FanDuel and Paddy Power going ahead.
FanDuel Gives Paddy Power USA Recognition
The deal will allow the UK firm to have a recognized US brand to enter the sports betting market. Fan Duel also has millions of active members, many of these will likely enjoy sports betting as well. The merger will see Paddy Power contributing $612 million worth of existing assets in America, as well as an additional $158 million in cash. This will allow the firm to take a 61% stake in FanDuel, with current FanDuel investors owning the remaining 39%.
This merger will create a $1 billion sports betting powerhouse in the USA. As more states legalize sports betting, the merger will become even more lucrative for both companies. Ever since it was announced that the Supreme Court would hear New Jersey’s case, many have suggested that big DFS operators, such as DraftKings and FanDuel, would be in the perfect position to move into sports betting.
Paddy Power Brings Sports Betting Knowhow
Despite their advantaged position, these firms have no real experience in running a sportsbook. This is why the merger between Paddy Power and FanDuel is such a big deal. FanDuel brings the American players and brand recognition, while Paddy Power brings the knowledge on how to run a successful sportsbook. It is the largest sportsbook in Europe and runs over 600 shops in the UK and Ireland.
The merger is expected to be completed during the third quarter of 2018. In addition to this, Paddy Power will have the option to raise its stake to 80% after three years and 100% after five. We’re sure this merger will not only benefit both companies, but the American sports betting market as a whole.