by Renee Israel
A new deal signed between the French gambling monopoly, Pari Mutuel Urbain
(PMU) and Paddy Power, will see the latter gain an excellent foothold in
the soon-to-be liberalized French gambling market.
According to the terms of the deal, Paddy Power will provide betting
technology and pricing to PMU over a five year period on an outsourcing basis.
Paddy Power share prices are expected to soar over the long run thanks to the
new deal.
PMU is one of Europe's largest betting organizations and has an annual
turnover of €9.3 billion.
"The strength of the deal is the quality of the partner which gives us an
excellent calling card of other such opportunities that may emerge," said the
Financial Director of Paddy Power, Jack Massey.
The deal is expected to provide around €3 - 5 million in revenue to Paddy
Power by 2012.
Another advantage of the new partnership deal is that Paddy Power will be
able to expand its workforce. By the middle of next year, it will add 50 new
jobs to its Dublin offices, and another 200 are expected to be added over the
next three years.
It will also be of mutual benefit to PMU. The Chief Executive of the betting
group, Philippe Germond said: "This partnership is going to enable PMU to offer
sporting bets online under its own brand and retain management of its client
database. Paddy Power will provide us with its expertise in sports betting.
Through this partnership PMU is given the means to be ready for the opening of
the online betting market in France next year."
The risk management and pricing functions will be outsourced to a third
party, despite the fact that Paddy Power works off the Orbis sports platform.
