FanDuel is getting into the U.S. sports betting game, and it is partnering with European gaming giant PaddyPower to do it.
The daily fantasy sports site announced on Wednesday that it will be merging its business with PaddyPower's U.S. business, Betfair, in a bid to go after U.S. sports gamblers.
The deal, expected to close in the fall, will see PaddyPower combine its U.S. assets with FanDuel's as well as contribute $158 million in cash to the combined company. PaddyPower says the cash will be used to pay down FanDuel's existing debt of $76 million (as of March 31) as well as fund the combined business.
PaddyPower will own 61% of the combined entity once the deal closes with FanDuel's investors owning the remaining 31%. PaddyPower can up its stake in the company to 80% after three years and take 100% ownership after five years.
FanDuel currently has 7 million players on its daily fantasy sports. The company hopes to have a sports betting offering ready in time for the 2018 NFL season and plans to continue to offer daily fantasy sports contests.
The announcement comes about a week after the U.S. Supreme Court struck down a ban on sports gambling outside Nevada. A number of states already plan to offer sports gambling in the near future, with New Jersey set open up its first sportsbooks in the next few weeks.
FanDuel's daily fantasy sports rival DraftKings has already announced that it will enter the U.S. sports gambling market, an ironic twist after both companies lobbied for years that their daily fantasy products were games of skill and not gambling.
https://www.usatoday.com/story/money/business/2018/05/23/fanduel-merge-european-gaming-giant-paddypower-sports-gambling/637255002/