Irish online betting giant Paddy Power Betfair, is considering merging its U.S. business with fantasy sports company FanDuel in an endeavor to target the U.S. sports betting market.
This follows a recent U.S. Supreme Court ruling that paved the way for states to legalize sports gambling after striking down a 1992 federal law that had barred gambling in most places.
According to the Dublin-based company, talks with FanDuel are still ongoing and there is no certainty as to whether an agreement will be reached.
Leaked news of the discussions reveal that the negotiations are in an advanced state and although FanDuel was once valued at $1 billion, negotiations for a purchase price will more than likely come in far below that. FanDuel has revealed that they will be launching a sports betting service if the ban was lifted and has conducted surveys that show that a huge portion of FanDuel’s customers would bet on sports if possible.
Firms like Paddy Power Betfair are endeavoring to find growth opportunities to offset the increasing cost of regulation in established markets such as Australia and Britain.
Paddy Power Betfair, which entered the U.S. fantasy sports market last year by acquiring an early-stage operator DRAFT for $48 million, runs the leading U.S. horse racing television and betting network and also has an online casino business in New Jersey which contributed an amount of $140 million or around 6 percent of its revenue last year.
It would appear as though a deal would make a huge amount of sense strategically for both sides and an amalgamated business would represent a powerful combination in the U.S. sports betting market.
