First, take a well-recognized US brand. Then, add an award-winning technology platform. And finish it off with a database of sports-loving US customers which is almost worth $6m. What do you get? A great deal between 2 giants, of course!
Indeed, in a recent press release Paddy Power Betfair (PPB) a well-established brand just confirmed a potential bid to buy FanDuel which is as you know a company that has interest in Fantasy sports. In short, with this deal PPB hopes to convert Fantasy League players into real sports betting customers.
Combined business in hope for a better tomorrow!
As you know, PPB is boosting its presence in the US. In fact, they announced they’re discussions to get a majority stake in FanDuel. The deal aims to recruit younger customers. In essence, they believe that the players of today are the customers of tomorrow. All and all, the discussions are ongoing, and nothing is certain as of now. What’s more is that Fan Duel has declined to comment, and yet, the structure of the potential deal is clear.
For the most part, the intention is to combine PPB’s existing US business and FanDuel. PPB would keep the majority stake in the business. To summarize, PPB would provide investment and sports betting technology, pricing models, risk and trading expertise and by joining up a US business, it will follow regulatory requirements.
Placing a bet on the future!
The future is the younger crowd and PPB seems to understand this. Overall, Daily Fantasy Sports numbers are growing in the US. And according to industry experts, PPB needs FanDuel to attract young bettors. In fact, the new generation promises more than the older players who used to bet on horseracing, for example.
FanDuel has around 6 million customers in its database. Of these, about 1 million are customers who pay to play. In fact, the business was once evaluated at $1bn. Yet, PPB will pay way below that, as the rumors go, because of the structure of the agreement. The potential deal would not be PPB’s first advance into the Fantasy League industry. Exactly a year ago it acquired start-up operator Draft for $50m.
So, let’s see if this deal goes through and what it means for the NJ casino industry.