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Flutter Has Acquired The Stars Group

October 04, 2019

- Grant Whittington

The latest news on the casino and betting front is that Flutter Entertainment, parent company of Paddy Power Betfair, will be putting up the money to buy Canadian gambling super-force The Stars Group. The deal, once finalised, will have created the biggest online gambling operator in the world.

Flutter’s shareholders will effectively become the richest casino entity shareholders on the face of the planet and will own a collective 55% stake in the new endeavour. The Stars Group’s shareholders won’t be lagging too far behind at a 45% slice of the ownership pie.

The US Paved The Way

The legalisation of sports betting in the US is what had prompted the entire thing for Flutter Entertainment. The operator did not waste any time in acquiring FanDuel once the US Supreme Court ruling was officially on the table and is obviously very eager to now build on its existing success in the competitive world of sports betting.

The motivation behind The Star Group’s relentless chasing down of the new combined establishment came mainly from a place of creating new value for its own shareholders. Big-scale lay-offs have sparked concerns among shareholders and the group obviously hopes that by now being able to leverage itself back into the role of gambling and betting global leadership, many of the prior uncertainties will have been successfully mitigated.

Early Estimations Positive

According to early calculations, the combined entity will enjoy the patronage of as many as 4 million global users. This calculation applies to the initial market and more growth is anticipated due to the new entity being soon in a position of occupying the market upper-hand position. This will go a long way towards strengthening existing partnerships as well as the formation of new ones.

The Stars Group is no small-time player and owns SkyBet (thanks to an earlier partnership between Sky and PokerStars) as well as the Australian powerhouse bet operator BetEasy. In addition to these, it also earlier on concluded a landmark agreement with Fox Sports.

Navigating Regulatory Storms

The combination of existing resources and licences will go a long way towards navigating the crippling regulatory challenges facing the global gambling and betting industry in world markets today. The positive effects will be seen in everything from sports betting to fantasy sports to online Poker. A stronger footprint that extends further and wider than ever before is expected to generate combined revenue income in the region of $3.9 billion each year going forward.

Sports betting, all other games and entertainment offerings aside, remains the piece de resistance of the deal. The US has opened up a slew of highly profitable opportunities by legalising betting on amateur as well as professional sports when it struck down the archaic rules under the provisions of PASPA.

No Real Problems In The Way

The acquisition deal does however still remain subject to various conditions and regulatory approvals being met and had, including that of the shareholders holding shares in both entities. Early indications are that there will not be any resistance on the shareholder front.

That effectively leaves only Canadian and US anti-trust laws to be successfully appeased and adhered to. The hope is that regulatory approval processes will have been finalised as early as the second or third quarter of 2020, with the best possible scenario being slightly earlier on next year. Both parties to the deal have indicated that they are optimistic regarding a successful outcome and that no real challenges are at this stage foreseen with regards to regulatory and anti-trust approvals. The future appears to be a bright one indeed for Flutter and The Stars Group

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