Flutter Entertainment announced Wednesday, that it had agreed to $6 billion share deal with the Stars Group.
The merger, it said, would create the World’s largest betting and gambling company in terms of revenue.
Dublin based Flutter, is the new name for the Paddy Power Betfair gambling giant. It is also owns New Jersey’s runaway sports betting market leader FanDuel and the UK’s Sky Bet.
The Stars Group (TSG) is the NASDAQ and Toronto-listed owner of international poker giant, Poker Stars. It also owns BetStars and together with FOX Sport, it recently launched the New Jersey sportsbook, FOX Bet.
News of the deal had an immediate impact on the stock market. US-listed TSG shares soared 50% in premarket trading and shares in Flutter jumped 20 percent.
Even gambling rivals GVC and William Hill saw a rise in their share price, probably because of the chance of further consolidation.
Combined Flutter, TSG revenue in 2018 was $4.7 billion
Combined annual revenues of Flutter and TSG, the announcement stated, would have totaled $4.7 billion in 2018.
And that, it added, would have made the Flutter-TSG combo the globe’s largest online betting and gaming operator.
Flutter CEO Peter Jackson, who will keep this role in the merger, said the deal would “turbo-charge” Flutter’s existing strategy.
“It will provide world-class capabilities across sports betting, gaming, daily fantasy sports and poker. It will also give us greater geographical and product diversification,” he added.
The merged group’s main listing will be in London. It will be headquartered in Dublin, Ireland, home and birthplace of Paddy Power.
Flutter Shareholders will own around 54.64% of the new company and TSG shareholders the rest of it.
FOX Sports will have right to 18.5% stake in FanDuel
From 2021, FOX Sports will have the right to acquire an 18.5% stake in FanDuel, the US’S fastest-growing sportsbook.
“We’re excited to be able to expand our partnership into FanDuel,” Fox Corp CEO Lachlan Murdoch, said. “Together with FOX Bet, we will be a leader in sports wagering in the US.”
The Murdoch’s’ Fox Corp last month launched the FOX Bet sports betting platform in New Jersey in partnership with The Stars Group.
The already established NJ sportsbook BetStars was simply re-branded as FOX Bet and media features were added.
TSG boosted its British operations last year when it purchased Sky Betting & Gaming for $4.7 billion.
Flutter and FanDuel merged
Flutter, meanwhile, had merged its US business with FanDuel, a strongly established fantasy sport giant and fast-growing sportsbook operator.
The deal was done, it claimed, with the intention of building the US’s largest online sports betting and gaming business.
And right now it’s well on its way to achieving just that. New Jersey is generating more betting handle than any other state and FanDuel is bringing in 50% of it.
The Flutter-TSG merger’s plan to grow its US footprint has clearly been influenced by a number of factors.
Number one must be the huge potential of the expanding US Market. Others are the higher taxes and the growing number of inhibiting regulations it faces in the UK, Ireland and Australia.
The combined group will operate in more than 100 countries. As things are now, about half of its income is generated in Britain and Ireland, 15 percent in Australia, and only 5 percent in the United States. The remaining 31% comes from the rest of the world.