Third Biggest Transaction in Gambling History

The changing legislation in the United States gambling and sports betting industry is opening up the United States for a gold rush by many gambling companies globally to stake their share of this new market. One such extraordinary effort is the 6 billion dollar bet which Flutter Entertainment now has on acquiring The Stars Group, their Canadian rival company.

Thirty years ago in 1988, a merger took place between three betting shops in Dublin. This resulted in the founding of the most significant role player in both the British and the Irish market, Paddy Power. In 2016 Paddy Power bought over Betfair, and the rebranding to Flutter Entertainment took place. Now Flutter Entertainment has its eye on the growing American market and has a bit on acquiring the Canadian company, The Stars Group.

Should this deal be completed, this would be seen as the third-largest transaction ever to take place within the global gambling industry. In the first position, we have the $27.6 billion deal by Caesar Entertainment with their PE purchase and secondly was Paddy Power when they bought Betfair in 2016 for $10 billion. The only agreement which might change their ranking, for now, is if the deal where Eldorado Resorts purchase Caesars for $17.3 billion is completed.

The Details of the Deal

Flutter is offering 0.23 shares in exchange for every share listed in the Toronto group. According to Bloomberg’s valuation, the company will be in a 40% premium position towards The Stars and giving them worth of $11.7 billion. After the merger, the group will be based in Dublin with an expected joint revenue of $4.7 billion yearly. If all of these figures realize as planned, then the company will be the biggest online gaming and sports betting provider globally.

Currently, there is a very competitive race among the bookmakers in Britain to obtain as much as possible of the growing American market, freshly liberated by the changed legislation. During May 2018 the American Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA), which has been struck down during 1992 in their federal law. PASPA determined that no sports betting will be allowed in the United States.

This then became a growing market in the underground world with a lot of illegal gambling going on. Since the changed legislation in 2018, the sports betting and online gambling market in the US showed, a massive increase and billions of dollars have been generated in revenue for the states too. With the new open market, it only makes sense that many sports betting operators who have been established for decades in the UK and Ireland would be keen on expanding their horizons.

Recently The Stars Group and Fox Sports signed a partnership to launch Fox Bet in Pennsylvania and New Jersey. This will contribute significantly to the expansion of Flutter. Last year Flutter also bought FanDuel, the New York-based fantasy sports provider, for $465 million.

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