The BBC reported that Paddy Power Betfair initiated negotiations after Monday saw the United States Supreme Court overturn a lower court decision in ruling as unconstitutional the Professional and Amateur Sports Protection Act (PASPA) of 1992.
The Dublin-based company said talks with FanDuel are ongoing and there was no certainty as to whether an agreement would be reached.
Firms like Paddy Power Betfair are looking for growth opportunities to offset the increasing cost of regulation in established markets such as Britain and Australia. States will now be able to choose individually whether to legalise sports betting.
An online casino and a horse racing betting exchange are also offered by the operator in the state of New Jersey.
FanDeal and another rival, DraftKings, held merger talks but plans were called off after the US Federal Trade Commission opposed the deal. Deutsche Bank restated a "buy" rating on shares of Paddy Power Betfair in a research report on Friday, March 9th.
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Analysts at Davy Stockbrokers said the deal would hand Paddy Power Betfair an extremely well recognised USA brand, an award-winning technology platform that can be converted to offer real money betting and a database of over 6 million US customers.
FanDuel, which is based largely in NY as its main businesses are in America, still maintains a significant presence in Scotland.
For Paddy Power Betfair, apart from the brand recognition, the FanDuel database would be a great source for acquiring new bettors from all over the USA as more states pass their sports betting bills.
The UK and Ireland-based bookmaker set foot in the US DFS market in 2017 for the first time, thanks to the acquisition of the local fantasy sports website Draft at the price of $48 million.