Gambling giant Paddy Power Betfair has agreed to merge with FanDuel, the US fantasy sports betting site founded in Edinburgh.
The move follows an announcement earlier this month from Paddy Power that discussions were under way to “create a combined business to target the prospective US sports betting market”.
FanDuel allows sports fans to gamble on fantasy sports leagues and contests in American sports. It has more than a 40 per cent share of the US daily fantasy sports market, with some seven million registered customers across 40 states.
FanDuel, which is based largely in New York as its main businesses are in America, still maintains a significant presence in Scotland. It grew to become one of two Scots unicorns, with a $1 billion valuation, alongside Skyscanner.
Under the agreement struck, Paddy Power Betfair will throw in its existing US assets worth some $612 million along with $158m of cash to take a 61 per cent stake in the combined business. Existing FanDuel investors will own the remaining 39 per cent.
Matt King, chief executive of FanDuel, said: “We are excited to bring these two great businesses together. The combination of brands and team, along with a shared culture and vision for the future, creates the leading gaming destination for US sports fans.”
Peter Jackson, chief executive of Paddy Power Betfair, said: “We are excited to add FanDuel to the group’s portfolio of leading sports brands. This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint.”
Stephen Trombala, corporate partner at legal firm Shepherd & Wedderburn, which advised FanDuel, said: “This is a tremendous deal, which is very exciting for the teams at FanDuel and Paddy Power Betfair. We are delighted to have been involved with FanDuel from its earliest days and look forward to the success of the combined business.”