Flutter Ent merges with the Stars Group in $12 bn deal
October has already started heating-up with numerous announcements and from online gaming and betting's perspective, this is certainly one of the biggest. Two of the world's biggest online betting companies, Flutter Entertainment and The Stars Group (TSG) who own PokerStars among other brands, have agreed to a merger to grow the sports gambling market in the US in a deal valued at a massive $12 billion.
The UK betting giant, Flutter Entertainment, which was formerly known as Paddy Power Betfair, has bought about 55% of the Canadian online gaming company Stars Group (formerly known as Amaya). Stars will continue to hold 45% share in the merged company which gets a boost of $4.5 million in annual revenues.
After the conclusion of the deal Flutter’s Chief Executive Peter Jackson will remain at the helm while Stars CEO Rafi Ashkenazi will assume the role of Chief Operating Officer. Flutter’s Gary McGann and TSG’s Duvyesh Gadhia will become the company’s Chairman and Deputy Chairman respectively.
The previous year, the US Supreme Court paved the way for states to legalize sports betting. Jackson said, “The opening up of the US sports betting market is perhaps the most exciting development in the industry since the advent of online betting.” Much earlier, Flutter Entertainment had shown interest in the development of fantasy sports and this deal would further generate $170 million of savings before the new company could allow the expansion for the same.
Here's a look at the biggest brands in each company's basket:-
Stars Group had already made a deal with Fox Sports back in May which will help them in accessing the US market for sports betting. Fox Sports will take 18.5% share in Fan Duel owned by Flutter Entertainment which is a fantasy sport betting website. PokerStars was entirely an online poker site although it moved into sports betting by launching Bet Stars a while ago. For now, the players on Stars or Paddy Power Poker would not face any alterations except the company is now shifting their focus on casino games and sports betting merger.
The investment director at stockbroker AJ Bell, Russ Mould says, “This will enable Flutter to capitalize upon the relaxation of American laws on sports betting, which is now legal in 11 states, with seven more primed to announce a launch date.” adding, “It will also enable the company to diversify further beyond the British and Australian markets, where it is the leader in online punting. Both arenas are relatively mature, tightly regulated and extremely competitive, even after a several rounds of consolidation in the industry.”
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