The Dublin-based company is acquiring DFS operator Draft in a deal worth $48 million.
“We are excited to be bringing Draft into the group and to further increase our presence in the United States,” wrote Chief Executive Officer of Paddy Power Betfair Breon Corcoran.
“Draft has a differentiated product and we believe the business, with the support of our marketing and technology expertise, can take share in the fast-growing daily fantasy sports market.”
Company expanding into more US markets
Draft CEOs Jeremy Levine and Jordan Fliegal will remain in their positions. Levine previously sold StarStreet to DraftKings in 2014.
Paddy Power Betfair will pay $19 million now and up to $29 million more over the next four years. The company is making “a substantial marketing investment in the business” over the coming years.
Levine said that this deal will mean that Draft will now be able to expand into further states.
“There are some states that have passed bills legalizing [DFS] that we are not in,” said Levine. He cites the cost of compliance as a reason.
Currently, Draft is available on web and mobile in 35 states. Levine said that in 2015, Draft secured $3.5 million for marketing and development. However, this deal will expand their advertising budget by approximately 100 times.
What are Daily Fantasy Sports?
Daily Fantasy Sports is a version of fantasy sports leagues in which players compete on a short-term basis. As the name implies, sometimes the window for play is just one day.
The DFS market in the US easily tops $1 billion, despite the industry facing legal challenges over whether the practice constitutes gambling.
Supporters say DFS is a game of skill. Conversely, critics maintain that players are simply making short-term prop bets on teams and athletes.
About Paddy Power Betfair
The merger of Irish gaming company Paddy Power and British rivals Betfair created one of the largest online gaming companies in the world with a record-setting £5 billion deal.
Paddy Power was Ireland’s most successful bookmaker. Betfair was the king of the betting exchange and one of the UK’s largest online gaming companies. The merger created a business with over 7,000 staff and more than £1.2 billion in sales.
As well as an online betting exchange and two distinct sports betting and online casino brands, the company also owns 600 betting shops across the UK and Ireland.