Paddy Power Betfair CEO Unveils Further US Expansion Plans

Dublin-based gambling operator Paddy Power Betfair is looking into opportunities to expand its business in the US, CEO Breon Corcoran told media.

Last week, the company purchased US fantasy sports operator DRAFT for a little less than $50 million, thus entering a market that has witnessed a fast-paced growth over the past several years. More and more US states have legalized fantasy sports contests within there borders and even more are expected to follow suit in the years to come.

With very few exceptions, sports betting is illegal in the US. This can to a large extent explain the surging popularity of fantasy sports as an alternative to traditional gambling options.

According to Mr. Corcoran fantasy sports have grown into a $300-million market that provides operators with an excellent competition opportunities around the US at a time when the European gambling scene experiences “pretty extreme” competition.

The introduction of stricter regulations across one European market or another, higher taxes, and other related issues have given rise to multiple larger- and smaller-scale merger and acquisition deals over the past two or three years.

Paddy Power Betfair was itself the product of the ongoing consolidation trend. The company was formed in early 2016, when gambling operators Paddy Power and Betfair combined their businesses in a £6-billion merger.

According to Mr. Corcoran, smaller gambling companies are those that struggle the most from the competition situation in Europe. The executive further noted that such businesses would either be forced to quit the market, or to try to join forces with counterparts in a bid to survive.

Europe currently presents smaller operators with very few opportunities to maintain good performance and Mr. Corcoran believes that long-term consequences for the gambling industry’s structure will ensue from this.

Paddy Power Betfair currently operates betting shops across Ireland and the UK and provides online gambling options in multiple regulated jurisdictions. In the US, in particular, it runs a betting network and horse racing television as well as online casino operations in New Jersey’s regulated iGaming market.

According to Paddy Power Betfair’s most recent quarterly results, revenue increased 15% year-on-year to £416 million. Revenue from the US increased 12% with revenue from its horse racing activities up 5% and proceeds from its online business in New Jersey up 68% year-on-year.

Mr. Corcoran pointed out that given the unabating competition, they have deployed the right strategy to increase revenue significantly and to enhance profitability “over the medium term”. The gambling group’s top official noted that its approach to the current situation is and will remain careful yet “guardedly optimistic”.

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