Paddy Power Betfair and FanDuel Both Have Much to Gain

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When the Supreme Court of the United States made its ruling that sports betting would now be determined by the individual states, striking down a 1992 law that restricted betting on sports, it unleashed a torrent of speculation and excitement for the gambling industry all over the world. Perhaps no industry more than that of daily fantasy sports (DFS), online gaming websites which have long tread the line between gambling, and skill-based game in legal codes in the United States.

Which is possibly why it recently became public knowledge that popular DFS company FanDuel is in talks with one of its European counterparts, Paddy Power Betfair, about the possibility of a merger. Rumors speculate that the two parties have been in talks for some time, and sources close to the deal have stated that the talks are still ongoing, with nothing finalized yet. Based in the UK and Ireland, Paddy Power Betfair began to make inroads in the US market in 2017 with its acquisition of Draft, a smaller DFS company it purchased for $48 million. They quickly set roots in the US market, setting a horse racing betting division and online casino in New Jersey, along with the TVG Network cable channel, which also operates an online betting network and a horse betting service in 35 states.

Regarding the negotiations, Paddy Power Betfair explained its primary goal is to merge its existing services with those of FanDuel. Talks likely began after FanDuel's negotiations with its other major US competitor, DraftKings, were blocked. The Federal Trade Commission ruled such a merger would violate anti-trust laws, as any resulting merged company would have market shares of 90%. Paddy Power Betfair has an eye to establishing itself now that there are emerging markets as each individual state sets about setting its own sports betting rules.

FanDuel, for its part, would be gaining a lot of experienced personnel from the European side of the little corporate marriage. FanDuel is well experienced in DFS systems, having been operating for around ten years. But Paddy Power Betfair will bring years of experience with gambling and a much more experienced team at managing a growing corporate network. FanDuel has previously shown interest in expanding into the sports betting markets following the Supreme Court decision, and to merge with Paddy Power Betfair would give it a lot of tools that go beyond its currently rather-limited focus on the DFS markets.

DFS companies have been natural shoe-ins for expanding into the new gambling markets. DFS has always walked a thin line in US Law about whether or not their services count as gambling. With the new freer rules, it will be easier for companies like FanDuel to branch out. The underground market is estimated to be at least $150 Billion by the American Gaming Association.

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