It’s a deal that could, in theory, change the face of the sports betting industry in the UK.
The notion of Flutter Entertainment purchasing the Stars Group might not mean much to you outright, but when we tell you that this would bring together the might of Paddy Power, Betfair and Sky Bet under one umbrella you can see why this would be a game-changing acquisition.
The terms of the deal are largely under wraps for now, and it is believed that the move would need to be approved by the Competition Commission, who might be an interested observer in how the UK sports betting sector would be affected.
However, we do know that Flutter shareholders would own approximately 54.6% of the new enterprise, while the Stars Group’s share-owners can expect a 45.4% holding.
The reason why the proposed acquisition has drawn plenty of column inches in the business press is obvious: if you combine the annual revenue of all parties involved in the deal, you’re looking at an organisation that would turnover some £3.8 billion per year – making it the biggest gambling operator on the planet.
As far as UK punters are concerned, it would create a business that combines Paddy Power’s one -of-a-kind marketing and advertising, Betfair’s platform that looks to reward serious punters and Sky Bet’s excellent coverage on social media; they were the first to offer a Request a Bet style service via Twitter.
Flutter’s chief executive, Peter Jackson, has got his eyes on the prize: he would retain the CEO role in the new firm. He said:
“The combination represents a great opportunity to deliver a step change in our presence in international markets, and ensure we are ideally positioned to take advantage of the exciting opportunity in the US.
“The combination will turbo charge our existing four-pillar strategy and provide world-class capabilities across sports betting, gaming, daily fantasy sports and poker, as well as greater geographical and product diversification,” Jackson concluded.
He also referred to the intense competition in the betting sector, and how easy it is to get left behind when competing against a huge number of rivals.
“[The deal] will give us a much bigger platform to operate from. When you are very small in a market, you don’t have anything that differentiates you and you become a bit of a commodity player.”
In the Land of the Free
One of the key factors behind the move is to consolidate a strong position in the burgeoning US market, with more and more states starting to legalize sports wagering in the country.
There is something of a cash dash to attract and retain new bettors in America, and for now Flutter will own a number of entities that can compete for power on such fertile ground.
In addition to Paddy Power, Betfair and Sky Bet, the group would also represent the likes of Fox Bet, formerly the BetStars platform in the US which has since been given a revamp by the Fox Sports TV network, as well as FanDuel, a well respected fantasy sports site that has also now made the move into sports betting.
And the fact that in the UK alone, the new group would have double the market share of nearest rivals suggests that the proposed acquisition may yet have a few hurdles to overcome with the watchdogs.