One of the largest bookmaking operators in the UK – Paddy Power Betfair – revealed that it has set foot into the US Daily Fantasy Sports market thanks to the purchase of the mobile-led operator DRAFT.
The Chief Executive Officer of Paddy Power Betfair Breon Corcoran commented on the deal, saying that the entire team of the British bookmaker was very pleased with the fact that DRAFT was to become part of the Group’s family. Mr. Corcoran also explained that the purchase would give them the chance to further expand their presence in the US.
According to Paddy Power Betfair’s boss, DRAFT offered a differentiated product, which would undoubtedly support the marketing and technology expertise of the British operator, so that the company take hold on a certain share of the rapidly growing DFS market.
Paddy Power Betfair revealed that it has acquired DRAFT for an initial cash consideration estimated to $19 million. The British bookmaker also explained that a further consideration of up to $29 million is to be paid over the next four years depending on future results.
The acquisition of DRAFT comes as a proof of Paddy Power Betfair’s increasing interest in the Daily Fantasy Sports market of the US. The company has been looking to boost its presence on the international regulated gambling markets, so the acquisition would provide it with the opportunity to reach US customers.
After the acquisition is finalised, DRAFT would still be led by its current Chief Executive Officers Jeremy Levine and Jordan Fliegel. Up to date, the business operates via its own betting website, but after the deal is finalised, DRAFT would be given access to the marketing and technology capabilities of Paddy Power Betfair. The latter called the purchase a “substantial marketing investment” that would be carried out over the next few years. The company also projected that the acquisition would lead to a loss before interest, tax and costs of about $20 million in 2017.
This is the first step taken by Paddy Power Betfair into the fast-growing Daily Fantasy Sports market of the US. Regardless of the eventual drop in the company’s earnings, the future effects of the acquisition would be undoubtedly beneficial for the British operator thanks to the great potential of the market. According to some market experts, the transaction has come as a demonstration of the increasing interest towards digital and more specifically, mobile-based companies, which were able to successfully meet the quickly-changing needs and betting habits of customers. Furthermore, DRAFT acquisition could be the first step that Paddy Power Betfair takes towards diversification of its product offering.
The bookmaking business of the operator was created by the merger of the market rivals Paddy Power and Betfair in 2016 into a combined entity to create a gaming and betting giant that is more competitive on the international gambling markets.
- Author
Olivia Cole
