Two of the biggest gambling companies, Flutter Entertainment and The Stars Group, to merge and create a superpower brand.

Flutter Entertainment merge The Stars Group

On the 2nd of October 2019, it was announced that an all-in share deal had been struck between Flutter Entertainment and The Stars Group. Once approved by shareholders, it will create the largest online betting and gambling company in the world, and it's sure to change the industry forever.

After joining forces, Flutter Entertainment shareholders are expected to hold 54.6% of the new company with TSG shareholders possessing 45.4%. Share prices in both companies rose sharply upon hearing the news with The Stars Group jumping up by a massive 30%.

Who is Flutter Entertainment?

Flutter Entertainment was previously called Paddy Power Betfair. This firm is already a behemoth within the UK and Ireland gambling sector, and this latest majority merger emphasises the clout it has.

In addition to holding hundreds of high street betting shops spread across Ireland and parts of the UK, Flutter operates some of the leading online gambling companies too, including:

  • Paddy Power - extremely popular online and retail bookmaker in the UK and Ireland
  • Betfair - the world's largest sports betting exchange by a mile
  • FanDuel - market leader in Daily Fantasy Sports (DFS) with over 8 million registered players
  • TVG - racing broadcaster and online betting network in 30 US states. Handles more than $2 billion of bets each year
  • Sportsbet.com.au - one of the big three online betting sites operating in Australia
  • Adjarabet - one of the top brands within the fast-growing Georgian online betting industry

Who is The Stars Group?

The Stars Group, simply referred to as TSG, is a Canadian company whose stock is traded on both the NASDAQ and the Toronto Stock Exchange. It is also, without a doubt, one of the big names in the online and mobile gambling industry, particularly in the area of real money poker games. These are the current crop of brands in its portfolio:

  • PokerStars - one of the most famous online poker rooms in the world. Home to the illustrious World Championship of Online Poker
  • BetStars - impressive sports betting site launched in 2015 to offer PokerStars players a top-quality place to bet
  • PokerStars Casino - a top-rated online casino not only amongst poker players but in its own right
  • PokerStars Live - the home of every PokerStars-sponsored event including the amazing PokerStars Players No Limit Championship
  • Full Tilt - launched in 2004, this is also one of the world's top online poker rooms
  • Sky Betting & Gaming - home of Sky Bet, Sky Casino, Sky Vegas, Sky Bingo and Sky Poker. Very established brand in the UK markets
  • BetEasy - popular online sportsbook serving punters in Australia. TSG had previously acquired Crownbet and William Hill Australia. Both sets of customers were migrated over

when two becomes one

Over the past 12 to 18 months, there have been numerous deals within the gambling industry, as companies respond to the vast number of punters that are now betting and playing casino games online and via mobile devices. However, this merger trumps all others as both were powerhouses in their own right, and now they are a $10 billion superpower.

Through synergising their products, it is expected that this new company will reduce its tax bill by a staggering £140 million a year. However, there are many other aspects to this deal.

TSG had recently penned an agreement with FOX Sports to rebrand BetStars as FOX Bet. FOX can also buy a stake in the DFS company FanDuel in 2021. The move also strengthens Flutter's grip on the lucrative UK market as it's bringing Sky Bet into the portfolio.

Conclusion

When you assess the power and potential of the brands within these two companies' portfolios, you can see that this could well be a match made in heaven for the shareholders of both companies. They will be dominant in poker, casinos, sports betting (traditional, exchange and fantasy sports) and also have a good foundation in bingo and other ventures.

It will be particularly interesting to see which brands merge. Sportsbet and BetEasy will most likely have to unless one gets sold-off which seems highly unlikely.

Certainly, the next few years are going to be very exciting as more alliances are formed. The downside of this is the entire industry will end up being run by a small handful of companies, and that's never good for competition.

Last update: 06-10-2019
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