Flutter Entertainment and Stars Group to Merge in $6 Billion US Deal

Dublin, Ireland based Flutter Entertainment is purchasing Toronto based online gaming company The Stars Group in a $6 billion all-share deal. The combined company would be the largest online gaming group in the world and expand Flutter’s holdings extensively into the burgeoning US sports and online casino betting marketplace.

Flutter Entertainment already owns a ton of marquee brands in the gaming industry. In Europe, the best known are likely Paddy Power and BetFair. In the United States, they’re recognized for Paddy Power, fantasy sports/sports betting brand FanDuel along with the TVG horse racing TV network and advance deposit wagering platform. They also own Australia’s Sportsbet.

The Toronto-based Stars Group is best known in the US for the PokerStars brand. They have existing partnerships with US casinos, most significantly the Reno based Eldorado Resorts which is currently in the process of acquiring Caesars Entertainment. The Stars Group also has a partnership deal in place with Fox Sports for a co-branded ‘Fox Bet’ platform.

Both companies saw their stocks react positively to the merger news. Flutter Entertainment shares on the London Stock Exchange were trading up 12.86 per cent on the news while shares in Toronto traded Stars Group Inc. closed up 2.12 per cent at CAD$20.25 per share.

Gary McGann, chair of Flutter Entertainment, called the union of the companies ‘transformational’:

“This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry.”

“Under Peter Jackson’s leadership we will bring together a management team with the experience required to ensure a successful integration of the businesses, with minimal disruption, during a time of unprecedented change in the sector.”

“The combined group will be a strong voice in the promotion of responsible gaming worldwide and will lead industry standards on the protection of customers, whilst building sustainable relationships with them.”

Stars Group chairman Divyesh Gadhia is clearly enthusiastic about the deal:

“The Board of TSG and I are delighted to recommend this exciting combination of TSG and Flutter, which we believe will create significant value for TSG’s shareholders.”

“Over the past four years our team, led by Rafi, has been working relentlessly and passionately to stabilise, grow and establish TSG as one of the clear leaders in our industry. We seized new opportunities in poker, significantly grew our casino business, acquired one of the UK’s most notable sportsbook brands in Sky Bet, built a significant presence in Australia through BetEasy, and teamed up with FOX Sports to launch FOX Bet to position ourselves to become a leader in the U.S.”

“We have long had respect for Flutter, and believe the combination is a natural next step in the evolution of the business, creating a leader in online betting and gaming with trusted brands, diversified revenues, stand-out technology and the best operational and managerial talent in the industry,”

The deal is subject to a vote of shareholders in both companies in the 2nd Quarter of 2020. If approved, the merger should finalize in the 3rd quarter of 2020. Some have speculated that the combined brands will have significant market share as to possibly present some regulatory issues should the Flutter/Stars mega-group be considered ‘anti-competitive’.

About the Author: Jim Murphy

For more than 25 years, Jim Murphy has written extensively on gambling theory and practice. Jim Murphy has been quoted in media from the Wall Street Journal to REASON Magazine. Murphy worked as a radio and podcasting host broadcasting to an international audience that depended on his expertise and advice.