PASPA repeal accelerates proposed PPB acquisition of FanDuel

PASPA repeal accelerates proposed PPB acquisition of FanDuel

Thursday, May 17, 2018 Posted by Luke Massey
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The deal would secure PPB’s access to an estimated six million DFS players

Paddy Power Betfair (PPB) has reacted to PASPA repeal by moving to secure a database of DFS players through the proposed acquisition of FanDuel.

It’s likely that this week's full reversal of the federal ban on sports betting outside of Nevada has triggered an escalation in talks that were already underway between the two parties.

A statement from PPB read: “Paddy Power Betfair plc (“the Group”) 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."

Some of the finer details of this proposed acquisition are still unknown, but reports suggest it will be for less than FanDuel’s $1 billion valuation. However, it is likely to be worth considerably more than the $48m PPB paid for FanDuel’s mobile-focused market rival Draft a little over a year ago.

FanDuel is a web-based fantasy sports game where register users put together virtual teams in sports such as American football to win cash prizes based on their success against other players.

Last year, US regulators blocked the company from merging with its main competitor DraftKings, over concerns that a combined entity monopolising more than 80% of the market would have deprived customers of the benefits of direct competition between the two.

The acquisition of FanDuel would see PPB secure access to an estimated six million DFS players across multiple states, while obtaining a recognised brand to target US sports consumers.

Totally Gaming says: PPB has long been sowing the seeds for PASPA repeal through its ownership of online horse and greyhound racing betting business TVG, purchased by Betfair in 2009. The acquisition of FanDuel would be an extension of an increasingly aggressive policy for PPB in the US, a market with a potential value in excess of $10 billion.

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