Paddy Power Betfair in talks to buy US sports company FanDuel
Paddy Power Betfair are in talks to buy American fantasy sports company FanDuel in a further sign of the race to grab a piece of the US sports betting market.
The United States Supreme Court lifted the ban on sports betting on Monday when it found in favour of the state of New Jersey's challenge to the Professional and Amateur Sports Protection Act (PASPA).
FanDuel has more than six million registered users and is one of the dominant players in the daily fantasy sports market in the US which is worth more than $300 million (approx £222m).
Paddy Power Betfair have already entered the market having bought DRAFT for $48m last year.
In a statement on Wednesday morning the firm said: "Paddy Power Betfair plc . . . notes the media speculation, and confirms it is in discussions, regarding a potential combination of the group's US business and FanDuel to create a combined business to target the prospective US sports betting market.
"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. A further announcement will be made as appropriate."
Analysts at Goodbody Stockbrokers said they saw the merits of the deal.
Gavin Kelleher said in a note: "We have long argued that Paddy Power Betfair, with its strong presence on the ground in the US and its multiple US licences, has excellent US optionality. A potential tie-up with FanDuel could give the combined business unrivalled US optionality."
Paddy Power Betfair have a long-established presence in the US having bought horseracing television and betting network TVG in 2009.
With the addition of the Betfair online casino and betting exchange in New Jersey and DRAFT, the company have customers across 46 states and more than $140m of annual revenues.
Paddy Power Betfair shares were up nearly six per cent at 8,225p by late Wednesday morning following the news.
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