The Irish online-game bookie Paddy Power Betfair will absorb the $1.2B American fantasy sports site FanDuel — giving it 61% ownership of the resulting company with an option to buy the whole thing outright, Recode reports.
The FanDuel acquisition is the first big-betting buyout since the Supreme Court legalized sports betting in the US this month.
Paddy Power is a betting exchange based in Dublin that operates across Europe, where sports betting laws have traditionally been more relaxed than in the United States.
But with one strike of the gavel, the Supreme Court created a hot new market for sports betting in the US — one far larger than the UK’s, previously the largest legal market for sports betting.
Now that companies like FanDuel and DraftKings (which have toed the line of legality in the past) don’t have to worry about breaking anti-betting laws, they’re positioned to scoop up the lion’s share of the $150B wagered illegally in American sports betting every year.
In 2017, FanDuel and DraftKings together accounted for 90% of the $2.6B American daily fantasy sports market — enough to get European companies like Paddy Power to shift their chips over into America.
At the time of the merger, both FanDuel and PPB were unprofitable — but since when has losing stopped gamblers?
FanDuel accepted PPB’s offer to pay down its $76m in debt and beat DraftKings. In exchange, PPB scoops up Fanduel’s 7m users and its 40% market share. But now that FanDuel has been sold, the big question is — who is going to buy DraftKings and its 8m users?
DraftKings CEO Jason Robins doesn’t offer any answers. In an interview with CNBC yesterday, the Robins said “it’s really just about finding the right partners now.”
Translation: They have more “hand” than they know what to do with.