(Bloomberg) -- FanDuel Inc. picked Scientific Games Corp. to provide the technology for its sports-wagering and online-casino businesses in the U.S. as legalized betting expands across the country.
The news sent shares of Scientific Games, controlled by billionaire Ronald Perelman, up 8.2% to $26.87 in New York, the biggest gain since November. That was enough to push the stock into positive territory for the year.
The company will provide the betting platform in current states where FanDuel takes wagers and in new ones that come online, according to a person familiar with the terms who asked not to be identified. The company already provides similar services to FanDuel's parent, Flutter Entertainment Plc, in Europe.
Both sports betting and online casino games like blackjack have surged in the U.S. since the Supreme Court overturned a ban on sports wagers outside of Nevada two years ago. FanDuel, which began life as a fantasy sports site, quickly captured the lead in New Jersey, the biggest U.S. market so far for legal online gambling.
Timely Acquisition
Las Vegas-based Scientific Games is benefiting from its $631 million purchase two years ago of NYX Gaming, a sports-betting technology provider.
FanDuel has other suppliers, including GAN Plc, which provides player account-management systems, and International Game Technology Plc, which helps handle sports betting at the Meadowlands Racetrack in New Jersey.
Fourteen states now have active sports-betting businesses, and seven more have authorized such wagers but not yet put them in operation.
The growing list of states approving sports bets led Morgan Stanley to raise its forecast for the industry in November. The investment bank now estimates the U.S. sports-betting market will reach $7 billion by 2025, up from an earlier forecast of $5 billion.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum
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