It was confirmed this week that betting giant Paddy Power Betfair is in talks to merge its American business with FanDuel, which was founded in the Scottish capital, “to create a combined business to target the prospective US sports betting market”.
The proposed merger follows the move by the American Supreme Court to overturn 1992 legislation that banned sports betting in most US states.
FanDuel’s five co-founders, who have all since left the business, stand to earn substantial amounts through their shareholdings if the deal goes through.
Former chief executive Nigel Eccles, who left FanDuel at the end of last year, has said he and his former colleagues would look to use the funds to help support other start-ups.
“The co-founders have already been investing their time and money in other companies,” he told The Herald.
“There are some great start-ups coming through Edinburgh right now and I’d love to be an angel investor in them.
“The other founders feel similarly that they would like to invest in some of those.
“I’m super excited about Edinburgh – it’s transformed in the last eight years.”
It is likely that the sale will be for a sum of at least several hundred million dollars.
“Discussions are ongoing and there is no certainty as to whether agreement will be reached, or as to the terms or timing of any transaction,” Paddy Power said in a stock market announcement on Wednesday.
No financial details of the transaction were given.
The group that stands to benefit from any sale includes the firm’s co-founders – Mr Eccles, Lesley Eccles, Tom Griffiths, Rob Jones and Chris Stafford – as well as the Scottish Investment Bank and angel investor Simon Murdoch.
On Monday, following the Supreme Court decision, FanDuel said: “The Supreme Court’s decision, which paves the way for states to legalise sports betting, creates an enormous opportunity for FanDuel as our platform, brand and customer base provide a unique and compelling foundation to meaningfully participate.”