Gambling firms Betfair and Paddy Power set for 5 billion pound tie up | Reuters

Paddy Power said first half operating profit had grown by a third to 80 million euros against the same regulatory headwinds.

Davy Stockbrokers declared “the two best quality companies in the European online gaming sector are on the verge of merging”.

“By putting together two distinct but phenomenally strong brands, well have a market leading position in the UK, Ireland, Australia and in the United States,” he told Reuters.

Paddy Power Chairman Gary McGann would keep his role in the combined group, while its CEO Andy McCue would become COO. Immediately prior to completion, Paddy Power shareholders would receive a special dividend of 80 million euros.

The new group would be the market leader online in the UK with a share of 16 percent, according to industry data, passing a merged Ladbrokes Coral group on 14 percent, as well as William Hill and privately owned Bet365.

Both firms also gave trading updates on Wednesday.

“We fundamentally believe this industry is all about scale,” said Betfair Chief Executive and ex-Paddy Power Chief Operating Officer Breon Corcoran, who would lead the new group.

DUBLIN/LONDON Betfair and Irish rival Paddy Power have agreed in principle on a 5 billion pound merger to stake a claim to leadership of the online gambling market in Britain.

Betfair said core earnings rose 19 percent in the three months to July 31, despite higher UK tax charges. Betfair finance chief Alex Gersh would also stay put.


Paddy Power is the larger of the two with a market capitalisation of 3.46 billion euros (3 billion pound) at Tuesday’s close, versus 2.43 billion pounds for Betfair, which has seen its shares rise by 140 percent in a year on the back of strong revenue growth.

Discussions were continuing to finalise an all-share merger but key terms have been agreed to create one of the world’s largest online betting and gaming groups with revenue of over 1.1 billion pounds, the companies said on Wednesday. Alongside its core exchange product, the firm is also targeting a larger share of the broader sports betting market.

The betting sector has seen a string of deals this year as companies respond to higher tax bills in Britain and tighter regulation by looking to bulk up and better compete in an online market buoyed by the increasing use of mobiles and tablets.

The gambling sector is seeing a wave of mergers.

Under the terms, Paddy Power shareholders would own 52 percent of the group with Betfair investors owning the rest. Paddy Power’s portfolio of almost 600 betting shops, more than half of which are in Britain, will also remain part of the plans.

Betfair is an exclusively online business, best known for its technology which allows gamblers to bet against each other.

Shares in Paddy Power and Betfair were up 18 percent and 17 percent respectively on the news.

Last month bookmakers Ladbrokes and Gala Coral struck an all-share deal, creating a 2.3 billion pound betting group. 888 and GVC Holdings are locked in a bidding war for online gambling firm Digital Entertainment.

Analysts pointed to significant scope to cut costs through the removal of duplication within the two businesses.. Under the proposed merger, Corcoran said both brands will operate side by side in Europe

Betting with bitcoin: Site lets Americans gamble on elections, sports with online-only currency

And it’s all made possible by bitcoins. 

Meanwhile, three thousand people on are using bitcoins to bet on everything from politics to entertainment.  The site’s bettors suggest that the movie “12 Years a Slave” has a 60 percent chance of winning Best Picture; that Republicans have a 50 percent chance of taking the Senate in November; that Hillary Clinton has a 33 percent chance of becoming president in 2016; and that the U.S. It has no physical form in paper or coin; instead computers “mine” bitcoins by generating new ones at specific durations and depositing them into virtual bank accounts., which started last July, has the same model as Intrade – except that it accepts only bitcoins, allowing it to receive funds quickly from Americans despite regulations that forbid banks to transfer money to it.

“With all the legal problems and regulations, that made it almost impossible to start a prediction market. Too speculative for us,” CFTC spokesman Steven Adamske told, a new company from Ireland, offers a “prediction market” that allows people to bet on everything from the U.S. “At the moment, bitcoin doesn’t look so good on that.”

Hanson is also skeptical about the reach of the new prediction market.

“Once regulators decide the trades are illegal they have lots of things they can do to shut it down. Gambling and prediction markets are legal in Ireland.

- Eli Dourado, a tech policy researcher at the Mercatus Center at George Mason University

“[Prediction markets can] have an adverse effect on the integrity of elections, for example by creating monetary incentives to vote for particular candidates even when such a vote may be contrary to the voter’s political views,” the 2012 CFTC order reads.

“The requirement to use the banking system meant that it was relatively easy for the U.S. During a political campaign, you may not know how to weight the different polls that come out, or how to interpret the bluster that emerges from each side, but the market price of each candidate on one of these sites represents a summary of what people who are willing to put their own money on the line believe.”

The digital currency bitcoin — once used to facilitate online drug deals — now appears to be enabling people to get around regulations banning online betting.

The CFTC recently sued the popular prediction market for operating without a license, which forced the site to shut down.

That is not how the government sees things.

‘I bet on the Seahawks and won a very modest amount of bitcoins.’

“I used Predictious to bet on the Super Bowl. When they do start to come up with them, we are going to try to proactively work with them,” Charlon said.

“You’d want the cash used to be something easily available to many potential users,” he said. has about a 50 percent chance of winning the most medals in the Sochi Winter Games.

The author of this piece, Maxim Lott, can be reached on twitter at @maximlott or at

“Irish regulators don’t have any guidelines regarding bitcoin yet. presidential election to the Olympics and the Oscars. Witness Silk Road,” Hanson added, referring to the online bitcoin-only drug market that survived anonymously for several years until the FBI identified the creator. is still small; Charlon said the total amount of bitcoins that customers have sent to the site is worth around $500,000.

Some prediction market experts, noting that the law generally does not specify what currency is used, are wary about whether betting with bitcoins can effectively escape government regulation.

He said that such markets would be good for society.

“I’m pretty sure that one can’t evade gambling or securities or commodities regulations by trading in francs or yen instead of dollars,” said Robin Hanson, an economics professor at George Mason University and the chief scientist at Consensus Point, which designs prediction markets that companies use to reach internal decisions..

Charlon said regulation is a concern, but Irish regulators have so far been fine. I bet on the Seahawks and won a very modest amount of bitcoins,” Eli Dourado, a tech policy researcher at the Mercatus Center at George Mason University, told

Some Americans are happy to have a place to bet online.

Bitcoins are virtual currency unconnected to any country, unlike every other currency on earth. But when I found out about bitcoin I thought: ‘That’s the perfect thing for this.’ Almost right when I discovered bitcoin, I started to work on this project,” he said.

But Dourado is hopeful about bitcoin prediction markets.

Betting of this sort is a legal gray area in the U.S., where the federal Commodity Futures Trading Commission (CFTC) decided in a 2012 regulatory order not to allow prediction markets on the grounds that they are “contrary to the public interest.”

While the CFTC forbids prediction markets that use cash, it is less certain that it will go after one that uses bitcoins.

The founder of, software developer Flavien Charlon, said he always wanted to create a prediction market, and that bitcoin solved the problem of transferring money.

“There is no way I can answer [that]. “It remains to be seen how much effort the government will want to invest in limiting bitcoin-based prediction markets, but since these markets could create a lot of value, I hope we can all come to a live-and-let-bet arrangement.”

“This is valuable information that the public should be free to access… government to regulate Intrade,” he said