Sports betting giant Paddy Power Betfair is set to dip its toe in the American market with the news that it is to merge with US company FanDuel.
FanDuel is a web-based fantasy sports game and is the second largest daily fantasy sports company in the daily fantasy sports industry with with 7 million registered users.
Paddy Power Betfair will initially own 61% of the combined business after contributing its US assets and $158 million of cash, with an option to grow that to 80% in three years and 100% after five.
According to Paddy Power Betfair, FanDuel has a 40% market share of the US daily fantasy sports market.
The UK and Irish firm's decision to explore the American market comes after a US Supreme Court ruling struck down a 1992 federal law which had outlawed sports betting nationwide, with the exception of Nevada and three other states. Legalised sports betting is a key reason for the merger, which Paddy Power Betfair’s CEO Peter Jackson confirmed in a statement on Wednesday.
"We are excited to add FanDuel to the group’s portfolio of leading sports brands,” Jackson said. “This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint. Together with our substantial financial firepower, we believe we are now well placed to target the prospective US sports betting opportunity".