Paddy Power Betfair is now the majority owner of FanDuel.
Wednesday morning, the European bookmaker and the US-based daily fantasy sports site announced the closure of the deal they signed in May. The component companies of the new group are each among the industry leaders in their respective vertical.
FanDuel customers received the news via e-mail.
Today is a milestone for the sports industry. We are excited to share that we closed our previously announced merger agreement with Paddy Power Betfair to combine our US businesses, allowing us to move forward with our promise to provide you, our loyal users, an even better experience.
The two giants will now storm forward as one, poised to enter the US sports betting market under the FanDuel brand. The press release indicates the combined entity will be known as the FanDuel Group.
Meet the new FanDuel Group
Here’s what FanDuel said about the reorganization:
Beginning today, we will be one company: FanDuel Group featuring a number of brands you love including FanDuel, TVG Network, Betfair Casino, and DRAFT. What does this mean for you? You will not see any changes to FanDuel for the time being. You will still have access to all of the contests and games you have grown to love and we look forward to bringing you new games, features, and a host of sports betting products for this NFL season.
FanDuel CEO Matt King has moved into the leading role for FanDuel Group, which now has six offices and a presence in 45 US states. Betfair US doesn’t exist anymore, so former CEO Kip Levin has assumed the titles of President and COO.
Closure also means that the NBA has divested its small piece of FanDuel, according to a league source. The two parties do retain their long-standing relationship as marketing partners.
The makings of PPB + FanDuel
CEO Peter Jackson highlighted the US market at length during the PPB earnings call in March. Regarding sports betting, Jackson said the group was “considering options for the appropriate way [it] would participate in the event of positive regulatory changes.”
Two months later, the US Supreme Court toppled PASPA, the federal ban that had limited sports betting to Nevada. Millions of bettors around the country suddenly became potential new customers.
The movement thereafter indicates that discussions were likely under way before that decision.
Legal Sports Report first caught wind that PPB and FanDuel might be serious about each other on the very same day. A day later, PPB publicly confirmed the rumors. A week later, it announced the acquisition. The two parties said they expected the deal to close in Q3, and it did so within the first few days of the quarter.
The exact terms aren’t disclosed, but PPB allocated its US assets plus $158 million in cash to the purchase. Its 61-percent stake in FanDuel could grow to 100-percent ownership over the course of the next five years.
In the meantime…
PPB and FanDuel began positioning troops while their transaction was still pending.
In early June, PPB inked a sports betting deal with Jeff Gural, owner of both Tioga Downs in New York and The Meadowlands in New Jersey.
During that announcement, PPB confirmed that it would use the FanDuel brand for its US-facing platforms. The FanDuel Sportsbook at the New Meadowlands Racetrack will open this Saturday, and an online/mobile platform should follow in the near future.
More recently, FanDuel announced its first sports betting deal. It will provide the sportsbook for The Greenbrier, the West Virginia governor’s resort which hosts an annual PGA Tour event. Regulators expect WV sports betting to launch before September.
FanDuel’s primary DFS competitor is making some noise in the new industry, too.
DraftKings secured a software partnership with Kambi that will allow it to offer sports betting for Resorts Atlantic City. The first DraftKings Sportsbook billboards are already up alongside highways and transit stations.
The two DFS leaders will soon be duking it out in the NJ sports betting arena — a brand new battlefield for both.
What’s next for FanDuel Group?
If the pace of the FanDuel acquisition is any indication, PPB is looking to establish early dominance in emerging US markets, too.
Here are the FanDuel Group’s current US assets:
- Horse betting site TVG
- DFS sites FanDuel and DRAFT
- Betfair NJ online casino
- Sports betting deals in NJ, NY, WV
It’s pretty hard to find bad things to say about the partnership on either side.
PPB has acquired one of the top few sports gaming brands, along with its database of millions of potential bettors. FanDuel now has the backing of a top bookmaker and the support of its worldwide resources.
The newer, bigger company seems to have the inside track on the expanding US industry at the moment, with deals in place across (at least) three states.