Betting firm Paddy Power Betfair (PPB) is in advanced talks to acquire FanDuel, a US-based daily sports fantasy platform backed by several corporates, Legal Sports Report reported yesterday.
A prospective price for FanDuel, which has raised about $420m from investors including mass media group Comcast, entertainment group Time Warner and its Turner Sports subsidiary, and internet and technology group Alphabet’s growth equity unit, CapitalG, has not been disclosed.
PPB confirmed the report in a statement, saying: “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. A further announcement will be made as appropriate.”
A potential price for FanDuel has not been disclosed, but an unnamed source told Axios it will likely be between $600m and $700m.
FanDuel is, along with DraftKings, one of the two biggest participants in the US daily fantasy sports market, but both companies have faced regulatory issues over whether their games, which require cash entry and which award prizes to winners, come under the remit of gambling.
The companies agreed a merger in late 2016 but withdrew from the deal in July 2017 due to further regulatory opposition, this time over a move that would create a virtual monopoly by market share.
However, the US Supreme Court ruled on Monday this week that a federal ban on sports gambling is unconstitutional, which would leave FanDuel free to market and run its games in every US state, and to expand into direct sports betting.
Ireland-headquartered PPB acquired another daily fantasy sports platform, Draft, in May 2017 for up to $48m, but a FanDuel purchase would give it a significant stake in the sector.
FanDuel was valued at more than $1bn as of a $275m series E round in 2015 featuring CapitalG, Time Warner Investments and sister unit Turner Sports, and Comcast subsidiaries NBC Sports Ventures and Comcast Ventures.
KKR, Shamrock Capital, Bullpen Capital, Pentech Ventures, Piton Capital and the owners of unnamed NBA and NFL teams also took part in the round, which preceded $55m in convertible note financing from existing investors at an undisclosed valuation the following year.
– This article was amended on May 16 to reflect the potential sale price.