The acquisitions in the field of online gambling cannot go bigger than that. At the end of September Flutter Entertainment, a holding company of the brands Paddy Power and Betfair announced that they will ally with Canadian based brand – Stars Group.
This merger is still a subject for approval from several regulatory states including Ireland, Canada, Australia, and the US, but this alliance could potentially result in the biggest online gambling business in the world.
FlutterThe expected date for the merge is the second half of 2020, however, the process depends on regulatory approvals. When the deal is made the stakeholders of Flutter holding will get 55% of the emerged online gambling giant, while Stars group will get the rest.
The Holding
The new entity will be the owner of the following well-known brands with the worth of around 11 billion euros: Pokerstars, Sky Betting and Gaming, Fulltilt, Betfair, and Paddy Power. Over the past year, all these brands together generated more than 4 billion euros from 4 million active clients in 100 countries from across the world.
Flutter Entertainment was created quite recently in 2015 as a merger of Betfair and Paddy Power brands. Stars group also expanded significantly with the recent multibillion-dollar acquisition of Sky Betting and Gaming. With the tough competition in the industry of online gambling companies tend to merge to consolidate their position and this merger confirms the latest trend.
Competitive environment and cost savings
Because of the regulations of the online gambling world, the margins tend to become smaller and such alliances can be a good way of saving the operational costs. The following merge between
two online gambling and betting giants promises to save around 150 million dollars every year. Which could potentially be good for stakeholders but not so good for the employees who now are risking losing their jobs.
The market found this news to be rather good. The price per share of Flutter Entertainment was increased to 7%. Once this deal is finalized the players might not notice the difference in the services of their online gambling preferred applications. However, those who play in the live dealer casino may be in the situation of shared-exclusive table areas. The offer can be so big that it will require a brand new live casino studio to be built.
The united group of companies will serve its customers in around 100 countries across the world and will present a good opportunity for the companies to expand further into foreign markets where they were not yet present.
According to Rafi Ashkenazi, CEO of the Stars group, this merge will enhance the strengths of the company and ensure a stable future for all the brands within this holding in a competitive and rapidly evolving industry.
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