A shake-up in the online casino and betting industry could be on the cards with the news that two of the sector’s biggest players are to join forces.
Flutter Entertainment, which is the parent company for the PaddyPower Betfair group, has struck a deal to purchase online casino operator Stars Group, with the combined company set to become the world’s largest online betting concern based on income.
The deal will also see Fox Bet, part of the Stars Group, which offers online sports betting to punters based in New Jersey and Pennsylvania, gain a share in FanDuel, an asset owned by Flutter Entertainment. FanDuel is a Fantasy Sports site that has branched out into online sports betting in the wake of the changes to gambling regulations in the US over the last year.
Based on available information, the combined Flutter Entertainment-Stars Group entity, which is likely to continue operating under the Flutter Entertainment banner, will be the biggest betting Group in the world, with combined income for 2018 of £3.8 billion. It will bring together the FanDuel, Betfair and Paddy Power brands with Stars Group’s well-known PokersStars and Sky Betting and Gaming operations, giving it a big chunk of the sports betting and online casino market.
Reports indicate that Flutter Entertainment will own the majority of shares in the new entity, with Stars Group owning a 45% stake. The current CEO of Flutter, Peter Jackson, is set to become the CEO with Stars Group CEO Rafi Ashenazi lined up as the Chief Financial Officer.
But such a potentially significant deal, representing as much as £11 billion in market capital, will be closely studied by regulators on both sides of the Atlantic, and there may well be significant regulatory hurdles for the two companies to clear before the merger is given the final go-ahead.
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