PaddyPower Betfair has entered a definitive agreement to acquire leading US DFS business FanDuel, it confirmed to the London market last week. FanDuel, one of the big two operators in the US DFS market alongside DraftKings, will be merged with PPB’s Betfair US business to target the prospective US sports betting market, following the repeal of the federal ban by the US Supreme Court last week.

PaddyPower Betfair will contribute its existing US assets plus $158m in cash for a 61% share of the combined business, with FanDuel investors owning the other 39%. “A mechanism” has been agreed to take PPB’s ownership to 80% after three years and 100% after five. PPB’s main US asset is horse racing TV and wagering network TVG. It also operates an NJ-only online casino and the nascent Draft DFS business.

The cash component will be used to pay down FanDuel’s existing debt, which stood at $76m at 31 March 2018, and provide working capital for the merged US business. PaddyPower Betfair chief executive Peter Jackson said: “We are excited to add FanDuel to the Group’s portfolio of leading sports brands. This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint.”