Paddy Power Betfair says in discussions to buy Fanduel

Research Analysts' Recent Ratings Updates for Paddy Power Betfair (PPB)

FanDuel previously stated its intention to launch a sports betting service should the Supreme Court overturn the federal 1992 Professional and Amateur Sports Protection Act (PASPA), which has blocked more states from offering regulated sports betting.

Many analysts believe London-listed firms are well placed to grab a slice of the United States market, where some estimates say almost $150bn (£111bn) in illegal wagers are placed every year.

The company said this morning it "confirms it is in discussions, regarding a potential combination of the Group's USA business and FanDuel to create a combined business to target the prospective U.S. sports betting market".

It is a major player in the USA fantasy sports market, where players pick teams and compete against others for cash prizes. Last year, the company bought a daily fantasy company, Draft.com, that has a far smaller footprint than either FanDuel or DraftKings, the two dominant players in the market.

FanDuel, which was blocked from merging with its main competitor DraftKings by the USA competition regulators past year, has been valued at $1bn by some analysts.

The shares rose 6.6% to £82.70 on the news of the bookmaker's plans for U.S. expansion, just days after a court ruling that could unlock the betting market in the world's largest economy.

They closed up a further 6% on Wednesday at £82.15 as markets digested the potential for the company to add FanDuel to its existing USA operation.

The company also runs an online casino in New Jersey, a horse racing betting exchange, and the USA horseracing TV channel TVG Network. Company officials hope to be licensed and offering online casino games and sports betting by 2019. Since the ruling was released, gambling stocks have surged amid speculation that the ruling could lead to a rapid and widespread expansion of sports wagering in the US, despite significant uncertainties that could delay and disrupt the process.

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