Flutter Entertainment Buys The Stars Group In Historic Deal

• Flutter Entertainment Plc, owners of Paddy Power Betfair and FanDuel, will be purchasing The Stars Group in an all-stock deal for $6 billion.
• The Stars Group has partnerships with Eldorado Resorts, Fox Sports, and Penn National Gaming.
• The combined companies create the largest online gambling company in the world.

TALLAHASSEE, Fla. – The online gambling industry will have to welcome in a new giant after Flutter Entertainment Plc announced last week that it will acquire The Stars Group (TSG) in a $6 billion all-stock deal. The deal comes as a way for both companies to take advantage of the growing U.S. sports betting market.

Flutter Entertainment owns Paddy Power Betfair, which dominates in the European market, and FanDuel which is quickly shaping up to be a dominate online sports betting force in the U.S.

The Stars Group, on the other hand, owns the American PokerStars brand and has partnerships in place with Eldorado Resorts, Penn National Gaming, and Fox Sports.

It’s important to keep in mind that Eldorado announced in July that they will acquire Caesars Entertainment, which will create the largest gambling company in the U.S. in terms of total assets and casino properties.

Both Flutter and TSG are based outside of the U.S., and for the most part, the only way to enter the online and legal sports betting market in America is by partnering with land-based casinos.

Now that the combined company will have partnerships with multiple casino companies its easy to see Flutter and TSG becoming the dominate online sports betting entity in the U.S.

In America alone, “you could see a market north of $20 billion of annual revenue, which would be far and away the biggest legal betting market in the world,” said Greg Johnson, an analyst at Shore Capital to Bloomberg.

The US sports betting market is still continuously growing. Since PASPA was struck down in May of 2018, 17 states outside of Nevada have now legalized betting on sports in some fashion. While not all of them have approved online sportsbooks quite yet, many of them have.

But, the acquisition by Flutter not only creates a Goliath of a company in America but for the entire world. The companies operate in 100 countries across the globe and according to CNN, “the combined group’s annual revenue would have been $4.7 billion in 2018.” 

Given the stricter online gambling laws in the U.K., the sheer size of the new company may create concerns over competition in that area. As more states legalize online sports betting that may become a concern for the U.S. in the future as well.

News tags: Eldorado Resorts | FanDuel | Flutter Entertainment Plc | Greg Johnson | The Starts Group