Casino & Betting Giants Merger to Become World’s Biggest Online Gambling Group
Scheduled for many months now, the estimated £12 billion ($14.4 billion) merger between the Canadian-based Stars Group and Europe’s Flutter Entertainment went ahead on Tuesday the 5th of May. The two companies will now operate under the name FLTR.
Flutter Entertainment, not long ago known as Paddy Power Betfair, owns Betfair, Paddy Power, Adjarabet, and SportsBet, among others.
The Stars Group oversees online poker market-leader PokerStars, SkyBet, and a few other sites in the fledgling US markets.
Between them, the two companies registered 13 million customers in 2019 and brought in a combined $4.91 billion in revenues.
The outlook for 2020 may not be anywhere near that figure, mostly due to the global outbreak of the COVID-19 coronavirus and the associated cessation of nearly all sporting events for the year.
However, the two companies were determined to go ahead with the deal. Just two weeks ago, a Flutter statement said that they “continued to believe in the strategic rationale for the merger” and that “the combined group will have a robust financial profile.”
In preparation for the deal, Flutter secured a £1.5 billion ($1.84 billion) loan around that same time. The money would be used to consolidate debts between the two merging companies and increase the “financial flexibility” of the new operation.
Confidence in Uncertain Times
The deal was finalized last week when both companies had a shareholder vote, with over 95% of both board members voting for the merger.
This was the very last piece of the deal, following the obtainment of regulatory approval from the relevant governments. The UK’s Competition and Markets Authority (CMA) was one of the agencies investigating the terms of the deal.
The CMA checks large mergers and other business deals to ensure an unfair monopoly isn’t formed—such as when it famously recommended the government block Rupert Murdoch’s Fox Group’s acquisition of broadcaster and telecoms giant Sky in 2018.
That deal didn’t go ahead, but this time, the CMA found the merger between Flutter and the Stars Group would “not worsen the safety and quality of offerings for those wishing to bet online.”
The European Commission also took an interest in the merger, which now sees Flutter control some 40% of the UK’s sports betting market. However, it also gave the green light a few months ago, paving the way for this mega-merger to go through.
Peter Jackson, CEO of Flutter, said the “bringing together of these exceptional brands, products, and businesses (…) means we can approach the future with confidence in these uncertain times.”
His statement also confirmed that the company would continue with what he called its “federal operating model,” meaning each section of the company operates somewhat independently from the rest.
The newly enlarged FLTR group started trading on the London and Dublin stock exchanges on the 5th of May 2020.
Its staff rosters were also not exempt from incoming changes, with Jan Boltz and Emer Timmons vacating their roles as non-executive directors at Flutter and ten more directors joining the team.
These included Divyesh Gadhia, the new deputy chair of the FLTR board. “We are very excited about the potential of this combination, which will create a global leader in online betting and gaming with a portfolio of trusted brands,” Mr. Gadhia said in a statement.
In similar news, an even bigger merger between legendary Las Vegas casino operator Caesar’s and El Dorado resorts is nearing completion.
Rumors were circulating that the deal may have been postponed due to the COVID-19 pandemic, but CNBC reported this week that the $14 billion merger should still be going ahead next month.
Keep checking our pages for more on massive mergers like these and all the other big changes in the world of gambling as the coronavirus pandemic continues—and stay safe!