Flutter Entertainment Officially Absorbs The Stars Group

The deal is done. One of the largest gambling mergers – arguably the largest ever in the world of online gambling – is now complete. The Stars Group is a part of Flutter Entertainment.

The brands that are now all under one group are:

• PokerStars
• PaddyPower
• Betfair
• Sky Betting & Gaming
• TimeForm
• OddsChecker
• Airton
• Full Tilt Poker
• Adjarabet
• FanDuel
• FoxBet
• TVG
• Sportsbet
• BetEasy

Quick and Clean

The original announcement came in October 2019. Flutter was going to acquire The Stars Group, and the goal was to complete the deal by the end of June 2020.

Everyone knew it would take months to obtain approvals from regulators around the world. The UK and Australia were going to be particularly complicated processes, as The Stars Group had just recently acquired Sky in the UK and Flutter was such a force in the gambling industry in Australia. The latter was made even more complicated when Sportsbet absorbed BetEasy.

However, once those two regulators submitted their approvals in recent months, everything went fairly smoothly from there.

Flutter shareholders approved the deal on April 21, and The Stars Group shareholders did the same on April 24.

Both companies shared first-quarter results for 2020, both with revenue growth despite the sports betting damper created by the coronavirus pandemic shutting down most sporting events around the world.

Done Earlier Than Planned

They had hoped to complete the deal before the end of June, but everything moved quickly in the past few months. And on May 5, 2020, Flutter issued a statement:

Further to the announcement on 4 May 2020 in connection with the completion of the combination, Flutter announces at 8 a.m. this morning:

• Completion took place;
• share dealings commenced; and
• the entire enlarged issued share capital of Flutter (constituting 143,987,624 ordinary shares) was admitted to the premium listing of the Official List of the Financial Conduct Authority and the Official List of Euronext Dublin and to trading on the London Stock Exchange’s Main Market for listed securities and the Euronext Dublin Market under the ticker “FLTR.”

The deal also prompted some board changes. Jan Bolz and Emer Timmons departed as non-executive directors of Flutter. The Stars Group CEO Rafi Ashkenazi was originally going to take on the role of Chief Operating Office of Flutter but ended up as one of the non-executive directors. The same went for Dave Gadhia, Richard Flint, Alfred Hurley Jr., David Lazzarato, and Mary Turner.

Stock Updates

When The Stars Group stopped trading on Nasdaq at the end of the day on May 4, the price per share was $27.21.

At the same time, Flutter was fluctuating on the London Stock Exchange. It closed at the same time at £9,832. Overall, however, the past month showed a solid upswing. The low point of the past 30 days was £7,234 on April 8, but its high point was $10,255 on May 1, just after the companies announced that the deal was nearly done.

Sportsbet-BetEasy Merger

The most pertinent part of the entire Flutter-TSG deal for Australians is the recent development of Sportsbet taking over BetEasy.

The original plan for the two companies was that Flutter and The Stars Group were going to run the companies together with a dual brand strategy. But in the last few weeks, the companies announced that BetEasy will eventually close as Sportsbet takes over.

The Australian Business Review dove into the deal a bit more this week.

As Sportsbet CEO Barni Evans took over both companies this week, he said the merged entity will welcome customers from competitors (ahem, Tabcorp) who have closed pubs. And by the time the Spring Racing Carnival begins in late August, the BetEasy brand should be retired completely. All customers will be merged to Sportsbet accounts.

However, the news isn’t all positive and the outlook rosy. Predictions say that about 25% of the combined 1,200 staff members of the two companies could lose their jobs.

In addition, all sponsorship deals will need to be renegotiated, including those with the AFL, Racing NSW, and Racing.com. Evans noted, “As much as possible, we hope to make seamless transitions with them.” And then he added that these issues need to be addressed quickly due to control clauses.

Sportsbet was already the market leader in Australia for bettors with 25% of the business, and BetEasy had 14%. Tabcorp is powerful and popular, though. Evans plans to win them over. He said he and his team are working hard on offers and merchandising ideas that will be appealing, as well as offering bets online that would appeal to those committed to retail spaces in the past.

Time will tell.