Paddy Power Betfair has entered the fantasy sports market in the United States through the acquisition of the early-stage operator DRAFT for $19m (€17.47m).
Up to an additional $29m (€26.7m) could become payable over the next four years, dependent on the business’ performance.
The deal gives Paddy Power Betfair access to the fast-growing fantasy sports market, which has seen annual growth of around 90% over the past three years and is now worth more than $300m.
DRAFT will continue to be run by Co‐CEOs Jeremy Levine and Jordan Fliegel and will now have access to the Paddy Power Betfair Group’s marketing and technology capabilities.
Commenting on the acquisition, Chief Executive Breon Corcoran said: "We are excited to be bringing DRAFT into the Group and to further increase our presence in the United States.
"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."
In an investor note, Davy said: "The acquisition of DRAFT, while small in the context of the overall group, is an interesting move by Paddy Power Betfair.
"It adds to the group’s US presence (where it already has TVG and its online casino business in New Jersey) while providing exposure to the fast-growing daily fantasy sports market for the first time.
"Paddy Power Betfair should be able to bring marketing expertise to the business as well as the financial support it needs to scale up and compete with the current market leader in the space.
"Ultimately, we see this acquisition as a relatively modest bet on the future of the daily fantasy sports market in the US."