Deal of the Month June 2018: Paddy Power Betfair positions itself to take advantage of lifting of US ban on sports betting

Deal of the Month | Mon 9 Jul | Author – Business & Finance
paddy power betfair

Paddy Power Betfair positions itself in the US market, merging with FanDuel and signing deals with Meadowlands Racetrack and Tioga Downs.

Betfair announced two US deals in June, positioning itself to benefit from a US federal court ruling lifting the ban on sports betting in most US states.

The New Jersey Assembly overwhelmingly approved a sports betting bill–allowing licensed betting on sports such as football, baseball and basketball–while New York continued work on legislation before its session ended on June 20. Analysts believe New Jersey residents will be allowed bet on sporting events by the autumn, with New York following suit early next year.

The FanDuel deal

In the first deal, Paddy Power Betfair merged its US subsidiary with New York-based fantasy sports specialist FanDuel, giving it 61 per cent of the merged business in exchange for assets and €135 million cash. It has the option to take 80 per cent after three years and 100 per cent after five.

The FanDuel deal is expected to close in the third quarter of 2018, giving Betfair control of an enormous database of customer information.

On track

Betfair US announced it reached long-term agreements for retail and online/mobile sports betting with Meadowlands Racetrack in New Jersey and Tioga Downs in New York. Under the agreements, Betfair US, the Dublin-based company’s American subsidiary, will provide a full suite of cutting edge sports betting products, including retail, online, and mobile sports betting to customers at the tracks in New Jersey and New York pending legislative and regulatory authorisation.

Betfair already operates an online casino in New Jersey. It operates under Golden Nugget’s online gambling license.

“We could not be more excited to partner with Jeff Gural and his partners for sports betting in New Jersey and New York,” said Kip Levin, CEO of Betfair US.

Meadowlands Racetrack has the potential to be among the best, if not the best, sports betting venues in the US. Combining these premier facilities with the global sports betting prowess of Paddy Power Betfair is a great match and will enable us to bring an unparalleled sports betting experience to customers in the northeast.”

Meadowlands Racetrack is on the grounds of the renowned Meadowlands Sports Complex in East Rutherford, New Jersey, which is located less than 10 miles from Times Square in the heart of Manhattan and in one of the most densely populated areas of the US. Rebuilt by Chairman Jeff Gural and his partners in 2013, the facility is state-of-the-art with modern and luxurious amenities for racing and sports betting customers. Tioga Downs, located in Nichols, NY, recently opened one of New York’s four commercial casino facilities featuring a hotel, entertainment center and modern casino floor featuring slots, table games and horse racing.

“Sports betting is a great opportunity for Meadowlands and Tioga Downs,” said Jeff Gural, Chairman of New Meadowlands Racetrack LLC and Tioga Downs LLC.

We went through a diligent process and reviewed several options to provide customers with the best sports betting experience possible. In the end, Betfair’s world leading products and experience proved the best choice. We are eager to get started with our partners, with whom we have had a long relationship for racing with TVG, on this exciting venture.”

Business & Finance Deal of the Month

Business Person the MonthBusiness & Finance, in association with KPMG, recognises the most important M&A activity in the business landscape through the ‘Deal of the Month’ award.