Murdoch claims victory in battle with Betfair owner in boost to gambling ambitions

Fox Corporation has been in a legal battle over a $3.7bn stake in US sports betting company FanDuel

Rupert Murdoch is claiming victory following an 18-month legal struggle with the betting giant behind Betfair and Paddy Power over a large stake in FanDuel.

In a boost for Mr Murdoch’s gambling industry ambitions, a New York judge ruled that his media empire Fox Corporation has an option to buy a 18.6pc stake in FanDuel – the market leader in US sports betting – from Flutter Entertainment at a value of $3.7bn (£3.3bn).But Flutter also argued the verdict had gone in its favour, claiming Fox would have to pay significantly more than the $2.3bn it had originally claimed it was entitled to pay.Peter Jackson, chief executive of the FTSE 100 company, said that the ruling “vindicates the confidence we had in our position on this matter and provides certainty on what it would cost Fox to buy into this business, should they wish to do so”.Meanwhile, both sides clashed on what the arbitration verdict meant for the eagerly-anticipated US float of FanDuel.Fox said it was “pleased with the fair and favourable outcome of the Flutter arbitration. Flutter cannot pursue an IPO [stock market float] for FanDuel without Fox’s consent or approval from the arbitrator”.Flutter hit back in a statement: “We can also confirm on-the-record that Fox does not have a block on any potential IPO of FanDuel, should one occur.”A separate legal claim on float veto is due to conclude early next year.

The ruling, released late on Friday, does set in stone Fox’s right to buy a stake in FanDuel at any point between now and 2030. The headline price increases by 5pc each year, meaning were Fox to acquire the shareholding now, it would have to pay $4.1bn. This would value FanDuel at $22bn – roughly the same as Flutter’s £20bn stock market valuation. Shares in the FTSE 100 company are likely to rise on Monday morning as a result.There was speculation when the legal challenge was filed in April 2021 that Fox’s FanDuel stake could actually be worth more than $5bn.Fox said in a statement: “Fox has no obligation to commit capital towards this opportunity unless and until it exercises the option. This optionality over a very meaningful equity stake in the market leading US online sports betting operation confirms the tremendous value Fox has created as a first mover media partner in the US sports betting landscape.”Because of the way the option had initially been negotiated, sources said that Fox retained faint concerns that it may have had no right to buy the FanDuel stake whatsoever.The complicated legal struggle comes as Mr Murdoch’s plans to combine News Corporation, the publisher behind The Wall Street Journal and The Times, with Fox. Media industry analysts believe the logic of re-merging the two businesses is to push further into the gambling sector.In August, Lachlan Murdoch, Fox chief executive, described sports betting as “a huge opportunity” for Fox Sports. The combination would strengthen the company’s hand when it comes to sports betting, sources told Reuters.America is in the middle of a sports gambling revolution. The country is repealing a decades-long ban on sports gambling on a state-by-state basis. Once completed, the US is expected to be the largest regulated sports betting market in the world.FanDuel has forged a dominant position in the sector. It was able to use its technology as a fantasy sports gaming operator prior to the repeal of the laws, to establish a 40pc market share of the US sports betting market.

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