Flutter Ent. weds Canada’s Stars Group

Colossal $11bn online gambling merger “in The Stars” for Paddy Power, Betfair owner, Flutter Entertainment.

There’s mischief afoot in the internet gambling realm! UK betting giant Flutter Entertainment, owner of Paddy Power, Betfair, and other notable betting brands, is writing its vows for the celebrity business wedding of the decade. Flutter’s industrious marriage is destined to create a company worth a combined value of more than US $11 billion; sure to be the industry’s last colossal merger of the decade.

According to the Wall Street Journal (and every other major news source from here to Timbuktu), Flutter is merging with Canada-based The Stars Group (TSG). As many of you know, TSG is the proud parent of online poker juggernaut PokerStars. A marriage between these two will irrefutably chisel the theme of the industry’s last five years – consolidation – into stone.

The Online Gambling Merger of the Decade

I find it terrifically interesting that the top mergers and acquisitions (M&As) of the last decade all have to do with the parent company’s of PokerStars. In 2014, the media couldn’t stop talking about the prolific acquisition of Rational Group by a virtual no-name company from the heart of Canada, Amaya Gaming. With nothing more than the largest set of brass balls on the planet, Amaya’s then-CEO David Baazov finagled PokerStars into his pocket for U $4.9 billion.

Now here we are, five years later, looking at a whole new story with a similar ending. Baazov left Amaya in 2016 amid insider trading allegation (having everything to do with his ballsy purchase of PokerStars), after which the company chose to rebrand itself The Stars Group. And, having scooped up a few more valuable acquisitions in recent years, the next-big-M&A is on the table, and it’s poised to create a company worth more than twice of the previous purchase.

Flutter Entertainment’s shares on the London Stock Exchange closed at 7634 pence on Tuesday, equating to a net value of £5.97 billion (US $6.95bn). TSG’s Nasdaq-listed shares closed at CA $20.25, putting the company’s net worth at CA $5.83 billion (US $4.41bn). At these prices, the implied value of the Flutter-Stars merger comes to $11.36 billion, and rising. Flutter’s shares rose 17% at opening Wednesday.

The Biggest Brands in Betting Unite

What makes this merger so significant is that it includes some of the world’s biggest walk-in and online gambling businesses. Combined, Flutter and TSG operate many of the world’s largest betting brands in every vertical of the industry, both online and on land.

Under the Wing of Flutter…

Headquartered in Dublin, Ireland, Flutter Entertainment’s vast portfolio includes:

Paddy Power – Operates a chain of betting shops in Ireland and the UK; runs Ireland’s largest telephone betting service; provides online bingo, casino, poker and sports betting on the web.

Betfair – Owner and operator of the world’s largest online betting exchange; offers an online bingo, casino, poker and sports betting website.

Sportsbet – Australia’s first licensed bookmaker (est. 1993); largest corporate bookmaker in Australia, offering online sports betting services as Sportsbet.com.au.

Adjarabet – Based in Tbilisi, Georgia, Adjarabet is that region’s leading provider of online casino and sports betting services.

FanDuel – Second largest daily fantasy sports betting company in the world, based in New York City, NY, USA.

TVG Network – American sports-themed satellite and digital cable network owned by FanDuel; operates online horse and greyhound racebook in 30+ US states.

Timeform – A UK-based sports data and content provider serving fans and bettors for the horse racing industry.

In The Stars for TSG…

From its head office in Toronto, Ontario, Canada, The Stars Group controls the following major iGaming brands:

PokerStars – World’s largest operator of online poker services, founded in 2001; operates numerous live and online poker festivals including (but not limited to) World Championship of Online Poker (WCOOP), Spring Championship of Online Poker (SCOOP), PokerStars Caribbean Adventure (PCA), PokerStars Championship, PokerStars Festival, and PokerStars MEGASTACK.

Full Tilt – Formerly a standalone poker network, Full Tilt is now a skinned, player-pooled extension of its sister-site, PokerStars.

PokerStars Casino – The online casino arm of TSG’s PokerStars.

BetStars – Global online sportsbook.

Another asset for the happy couple in this opulent online gambling merger is TSG’s recent partnership with Fox Sports. In September, the two rolled out Fox Bet, an interactive sports betting operation currently serving New Jersey and Pennsylvania.

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