DFS Has a New Player: With $48 Million Worth of Overseas Online Operating PowerPublished May 11, 2017 by Lee R
A foreign gaming operators and a DFS startup have joined forces to compete in the monopolised US DFS market.
This is the result of Paddy Power Betfair PPB’s acquisition of mobile-led Daily Fantasy Sports product DRAFT. The $48 million deal formalizes preparations for the Irish gaming operator to enter the massive and now expanding U.S. daily fantasy sports market.
Paddy Power announced the acquisition Wednesday through a regulatory filing of agreement to acquire fledgling DFS operator DRAFT for $19 million in initial cash consideration with further cash considerations on the table totalling an additional $29 million payable over the next four years.
Welcoming Novice Players
As a modest-stakes DFS league catering to casual players via a mobile-first approach in operation since 2015, the DFS operator has raised $4.5 million in venture backing to this point with a staff of 10 employees.
The Latest DRAFT
PPB specified there will be no restructuring within it’s new acquisition, whose attractive technology and marketing capabilities will continue to be run by DRAFT CEO’s Jeremy Levine and Jordan Fliegel.
On the PPB website, CEO Breon Corcoran lauded the exposure to the fast-growing US market that her organisation is about to experience as “complementary” to other PPB holdings:
“We are excited...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.”
Leaning the Competition
Levine praised the deal for eliminating potentially costly competition in marketing and advertising between the two operators.
Landmark Deal: Reason 1
The deal bringing a known European brand into the lucrative yet monopolized US DFS market opens the door for more online gambling brands licensed overseas to enter the US market via DFS.
Landmark Deal: Reason 2
The deal also welcomes a new competitor into the dominated US DFS market, setting a precedent for a capital investment stream from overseas online operators to fund more DFS technology start-ups for market entry.
This deal paves the way for a transformative expansion for DFS in the US, and beyond.