Paddy Power Betfair is the UK- and Ireland-based bookmaker moving quickly into the emerging US sports betting market through its US division, Betfair US.
Paddy Power is an Irish bookmaker. It first began operations in Dublin, Ireland, in 1988. The company first ran a chain of licensed betting shops in Ireland and the UK. Then it moved even further into the internet gambling sector with online sports betting, online poker, online bingo and online casino sites.
Betfair is a UK-based online gambling company founded in 2000. The company operates the world’s largest online betting exchange, a sportsbook, online casino, online poker and online bingo sites.
Betfair launched its own New Jersey gambling website site in 2013. Betfair also owns other subsidiaries in the US, including a New Jersey horse racing betting exchange and the TVG Network, a horse racing TV channel and pari-mutuel online betting network active in 35 states.
The Paddy Power-Betfair merger
In February 2016, the two companies merged to create Paddy Power Betfair. The merger saw former Paddy Power shareholders take a 52 percent ownership share with the other and 48 percent going to former Betfair shareholders. Paddy Power Betfair is listed on the London Stock Exchange. Plus it is a constituent of the FTSE 100 Index.
At the time, Paddy Power Betfair’s US division, Betfair US, was comprised of TVG Network, DRAFT daily fantasy sports, Betfair’s NJ online casino, and the Betfair New Jersey horse racing betting exchange.
Betfair and FanDuel
However, in May 2018, Paddy Power Betfair agreed to merge its US business with leading fantasy sports operator FanDuel.
The move was said to be an effort to target the emerging US sports betting market. The market is growing as a result of the May 14, 2018, U.S. Supreme Court decision to lift the federal ban on sports betting.
Paddy Power Betfair agreed to contribute its existing US assets worth just more than $600 million, along with almost $160 million in cash, allowing it to take a 61 percent ownership stake in the business. The remaining 39 percent went to FanDuel investors.
FanDuel’s contribution includes its daily fantasy sports business with a 40 percent market share in the US and revenues of $124 million in 2017. However, the company has an existing debt of $76 million.
FanDuel was once valued at more than $1 billion before state governments started regulating fantasy sports operators.
Additionally, the deal allows Paddy Power Betfair to increase its ownership to 80 percent after three years, and 100 percent after five years through various options at market value.
At the time, Paddy Power Betfair Chief Executive Peter Jackson claimed the merger created the largest online business in the US and put the company in a position to target the opportunity presented by US sports betting.
Paddy Power Betfair will assume operational control of the business in 2018, which will be renamed FanDuel Group.
Betfair and NJ sports betting
In the meantime, the newly formed FanDuel Group is already making a strong move into the US sports betting market.
In June 2018, Betfair US announced it had reached two agreements for live and online sports betting with US racetracks. This included Meadowlands Racetrack in New Jersey and Tioga Downs Casino Resort in New York. Jeff Gural and various partners own both facilities.
FanDuel Group will provide live and online sports betting products at both facilities, pending legislative and regulatory authorization. The FanDuel Sportsbook at the Meadowlands opened on July 14, becoming the fourth sportsbook operator active in the state.
Betfair US CEO Kip Levin said Meadowlands has the potential to be the best sports betting venue in the US. This is probably true, considering it is on the grounds of the Meadowlands Sports Complex in East Rutherford — the same spot where the NFL’s Giants and Jets play. Plus, it’s less than 10 miles from Times Square, one of the most densely populated areas in the country.
Tioga Downs is a converted racino. It became the first of four commercial casino facilities to open in New York over the last 18 months.
Levin also said combining both facilities with Paddy Power Betfair’s global sports betting prowess makes for a great match.
Gural said sports betting represents a great opportunity for both properties. Plus, the combined forces of Betfair and FanDuel will help them provide customers with the best sports betting experience possible.