Paddy Power Betfair acquires sports site Fan Duel

CALIFORNIA, U.S. - With an eye on the U.S. sports betting market, prominent gambling firm Paddy Power Betfair has agreed to merge with the U.S. fantasy sports betting site Fan Duel.

The company is said to have set its sights on the sports betting market in the U.S., that is set to open up after a court decision.

Earlier this month, the U.S. Supreme Court overturned 1992 legislation that banned sports betting in most states.

As part of the agreement, Paddy Power Betfair said that it will throw in its existing U.S. assets worth $612 million along with $158 million of cash to take a 61 percent stake in the combined business.

Existing Fan Duel investors will reportedly own 39 percent.

The companies said that under the terms of the deal, Paddy Power can increase its stake in Fan Duel to 80 percent after three years and 100 percent after five years.

The deal is expected to close in the third quarter this year.

Founded in Scotland, Fan Duel allows sports fans to gamble on fantasy sports leagues and contests in American sports.

It allows its customers to bet on fantasy sport games, based around NFL American Football, NBA basketball, MLB baseball and NHL ice hockey.

Currently, there are an estimated 30 million adult fantasy sports players in North America.

The Dublin-based company will reportedly control the business, which will become a subsidiary.

Peter Jackson, head of Paddy Power Betfair said that the combination would create the "largest online business" in the U.S. gambling industry.

Adding, “[We will have] a large sports-focused customer base and an extensive nationwide footprint.”

Last year, Paddy Power Betfair first entered the U.S. fantasy sports market with the acquisition of a U.S. fantasy sports site, Draft for $48 million.

Paddy Power already has a U.S. division, including the TVG Network, a horseracing TV channel and an online betting network which is active in 35 states.

It also boasts of an online casino and a horseracing betting exchange in the state of New Jersey.