Paddy Power Betfair to enter daily fantasy sports sector

In a stock exchange announcement Wednesday, the online and land gambling giant Paddy Power Betfair revealed that it is to enter the daily fantasy sports sector with the acquisition of early-stage operator DRAFT and its website playdraft.com.

DRAFT is mobile-led, has a differentiated product and a strong management team, the announcement advises. The business will continue to be run by Co-CEOs Jeremy Levine and Jordan Fliegel and will now have access to the PPB group’s marketing and technology capabilities.

This acquisition provides the Group with exposure to a fast-growing market (c.90 percent CAGR between 2014 and 2016 to over $300 million revenues) and complements PPB’s other businesses in the United States.

The initial cash consideration paid on completion was $19 million. Further cash consideration of up to $29 million will become payable over the next four years depending on the business’ performance.
To maximise the growth opportunity, substantial marketing investment in the business is envisaged in the next few years, with an EBITDA loss of approximately $20 million forecast in 2017.

Paddy Power Betfair CEO Breon Corcoran said that the acquisition would further the group’s 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 marke,” he said.

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