Online gambling companies have been consolidating over the last few years and two of the world’s largest gambling companies are about to combine forces. Various sources have confirmed that Flutter Entertainment will merge with Canadian-based The Stars Group. The merger will result in the creation of a new online gambling company spanning multiple platforms.
Flutter Entertainment is best known for its Paddy Power and FanDuel brands. The Stars Group is best known for operating PokerStars, the World’s Largest Online Poker Site.
Flutter Entertainment Deal Worth $6 Billion
The deal between Flutter Entertainment and The Stars Group is a classic merger and this one will be an all-stock transaction worth around $6 billion. Under the terms of the deal, the new company will consist of 54.64 percent Flutter Entertainment stockholders and 45.36 percent Stars Group stockholders.
This isn’t a deal where Flutter cleans house and takes over. Rather, they are combining resources from both companies to create a strong core for the new entity. The new company Board will consist of 14 members from both The Stars Group and Flutter Entertainment.
Gary McGann will become the new Chair of the combined group. He currently serves as the Chair for Flutter Entertainment. Peter Jackson will be the CEO while Jonathan Hill will be the CFO of the new company. The two currently serve in those roles with Flutter. Rafi Askenazi will become the new company COO. He is currently the CEO at The Stars Group.
Primary Focus Will Be on the US Market
Many of the moves made by online casino companies in today’s market are done in anticipation of online gambling regulation in the United States. Online gambling legislation is beginning to explode in the region and companies are positioning themselves to take advantage of this.
Flutter Entertainment owns multiple online casino brands, including Paddy Power and Betfair. The Stars Group also operates PokerStars in New Jersey and many expect the company to begin operations in Pennsylvania by the end of the year. Both groups also own brands that will take advantage of other online gambling products offered in the United States.
States such as West Virginia will be launching online casinos over the next year or two. This gives the new company additional options for expansion.
How Does This Impact Australia?
As you already know, PokerStars left the Australia region a couple of years ago and Flutter Entertainment does not have an online casino prescience in the country. However, this merger is still of importance when looking to the future.
It is likely that we will see online gambling regulated in some form in Australia in the next few years. Once that happens, that will open the door for the new combined company to offer services to the region.
Paddy Power, Betfair, and PokerStars are all brands that would thrive online in the region due to their brand recognition and large player pools. PokerStars is the world’s largest poker site by a large margin. Paddy Power is one of the oldest online gambling companies in the world.
Merger Still Needs Shareholder Approval
Like any significant move by a publicly-traded company, shareholders must still approve this deal. Voting on the measure will take place during Q2 of 2020. After voting, the merger will finalize sometime during Q3 of 2020.
Flutter Entertainment has yet to reveal what the new company name will be, but you can expect that an announcement will come before the end of the year. Ultimately, this will make the new company the largest online gambling entity in the world and one that will help shape the future of the online gambling community.