Edinburgh-based Kotikan, which employs 56 staff and has a turnover of £2.4m, has worked with FanDuel since 2013 and developed its mobile offering.
Nigel Eccles, chief executive of FanDuel, described the deal as an “acqui-hire” given all Kotikan’s staff will be taken on.
Kotikan was founded in 2007 and has also developed apps for clients including Skyscanner and Standard Life.
Chief executive Gavin Dutch said: “Since we started working with FanDuel in 2013, it became more and more apparent that the two companies were incredibly well aligned in both values and culture, so this move feels very natural.
“The whole team at Kotikan are hugely excited to join FanDuel and pursue our shared ambition of creating a stratospheric success story for Scottish technology. We all care about the same things and are excited to make products that are loved by millions.”
Eccles said: “At FanDuel we set the bar consistently high and hire only the best talent - this acqui-hire of Kotikan strengthens our existing team and will help drive forward the business.”
Last week FanDuel closed its latest funding round backed by big-name US investors including Google Capital and Time Warner.
The move, which is thought to have put a value of well over $1 billion on the company, underlines the remarkable rise of the business since it was founded in Edinburgh just over five years ago by a group of entrepreneurs and graduates.
The oversubscribed financing round, which was led by US venture capital giant KKR, brings the total capital raised by the company to $363m and will be used to accelerate its growth across the US and Canada as well as expanding the management team. FanDuel, which has in excess of one million active users, charges players to compete in fantasy leagues across the NFL, NBA, NHL and other US sports.