Paddy Power Betfair bet on US business

It's investing up to $48m in a new project...

Paddy Power Betfair has entered the growing online fantasy sports market with the purchase of the New York-based early stage firm, Draft.

The upfront purchase price is $19m but this could rise to $48m over the next four years depending on Draft’s performance and currency values.

It is estimated that the online fantasy sports market is worth about $300m in the US - and Draft is among a wave of companies offering fantasy games which offer cash prizes.

The market has nearly doubled in value over each of the past three years. It's dominated by two companies, FanDuel (which was founded by a Nothern Ireland native) and DraftKIngs. They are currently in the process of merging.

"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," Breon Corcoran, chief executive of Paddy Power Betfair, commented.

This is a long term investment in a rapidly-growing industry - Paddy Power Betfair expects to a make an EBITDA loss of $20m this year.