FANDUEL, the Edinburgh-based fantasy sports specialist, has raised $25 million (£19m) of debt to fund its short-term operating costs while it awaits completion of its takeover by Paddy Power Betfair, writes Scott Wright.

And its directors have warned that further funding will be needed if the deal does not go through.

Paddy Power Betfair announced that it had struck a “definitive” agreement to buy FanDuel, which pioneered daily play in the US fantasy sports market, on May 23. It would own 61% of the combined business on completion of the deal, with FanDuel investors holding 39%.

FanDuel’s directors disclose in a new filing at Companies House that $25m was raised in May “to fund its short-term operating plan in advance of the expected merger completing”.

However, they warn that “further funding will be required to operate the Company in the longer term” if the deal does not go through as expected. “The related uncertainty represents a material uncertainty that casts significant doubt on the Group and Company’s ability to continue as a going concern and, therefore, its ability to realise its assets and discharge its liabilities in the normal course of business,” the directors said.

“The directors, nonetheless, are confident of the successful approval of the deal and eventual completion and, accordingly, the financial statements have been prepared on a going concern basis”.

The disclosure is contained in the directors’ report attached to the company’s accounts for the year ended December 31, 2016, which have just become available at Companies House.

The accounts show the firm, founded by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones and Chris Stafford in 2009, made an operating loss of $75.7m.

The company said losses continued to be made in 2017 because of lower than expected revenue, costs linked to its scrapped merger with US rival firm DraftKings, and continued investment in products and customer acquisition and retention.