The World’s Largest Online Betting Shop Founded By Paddy Power Owners

The World’s Largest Online Betting Shop Founded By Paddy Power Owners

Flutter Entertainment, the owner of Paddy Power and Betfair, will buy The Stars Group (TSG), which owns Sky Bet, in a $ 10 billion deal that will create the world’s largest online betting company by revenue.

The deal, which has been settled with an eye on the new and fast-growing US sports betting market, will give Flutter shareholders a 55% majority stake in an online gaming group, which together generated sales of 3 over the past year, $ 8 billion.

Investors gave their immediate approval for the acquisition of shares, which is expected to cost $ 140 million a year, increasing Flutter’s stock by 20% to $ 91.96. It will include a commercial link with US broadcaster Fox Sports, led by Rupert Murdoch’s son Lachlan, who is already the US betting partner for TSG Canada.

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From 2021, Fox Sports will have the right to acquire 18.5% of the US fantasy sports business FanDuel from Flutter.

Flutter bought FanDuel last year when it tried to establish a US Scotsman in the wake of the Supreme Court’s decision to legalize sports betting, a ruling that triggered a race between British bookmakers to enter the lucrative new market.

Flutter’s CEO Peter Jackson will lead a combined business serving 4 million players in 100 markets.

He said the acquisition would “boost” the company’s expansion strategy into new markets while retaining a leading position, where it is already well established, in the UK, Ireland and Australia.

“We believe the combination of Flutter and TSG will bring significant shareholder value,” he said.

“We will have an exceptional portfolio of leading leisure brands and world-class products on industry-leading technology platforms.”

Flutter chairman Gary McGann said the combined group would also be a “strong voice in promoting responsible gambling worldwide”.

In his previous incarnation as Paddy Power Betfair, Flutter agreed to charge US $ 2.2 million for responsible gambling failure last year, a settlement that relates in part to an ongoing legal dispute with the victim of alleged theft by a problem gambler.

It was one of the few British high street bookmakers to support the government’s reduction to fixed rate betting terminals (FOBTs) from $ 100 to $ 2.

It was accused of attempting to circumvent the restriction after a Guardian investigation found that it had developed a game that mimicked the roulette-style machines while technically adhering to FOBT curbs.

It was eventually forced to withdraw the game from the Gambling Commission.

Benefits of the Acquisition

Analysts said the acquisition of TSG would spur on Flutter’s efforts to conquer the US and signal a new consolidation in a sector that has already experienced a series of mergers.

“This will allow Flutter to benefit from the relaxation of American sports betting laws, which is now legal in 11 states, with seven more ready to announce a launch date,” said Russ Mold, investment director at stockbroker AJ Bell.

“It will also enable the company to diversify beyond the UK and Australian markets, where it is the market leader in online punting, with both arenas being relatively mature, tightly regulated and extremely competitive, even after several rounds of consolidation the industry.

“The recent deal in the book and gambling business could also trigger speculation about which companies will be acquired next – and which companies will be their targets.”

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