This comes on the back of a merger deal, uniting the British/Irish based Flutter Entertainment Group along with the Canadian backed Stars Group.
Flutter is the union of two British giants of the wagering industry: Paddy Power and Betfair UK.
Paddy Power was the sole owner of the Sportsbet brand in Australia prior to their merger with Betfair UK.
Stars Group meanwhile is the brains and brawn behind Beteasy, after acquiring a significant shareholding after the acquisition and merger of the William Hill and Crown Bet brands during early 2018.
The shareholding split for the new venture will see Flutter hold an approximate 55% holding while Stars Group will hold approximately 45%
The merger will impact on nearly 4 million customers in many overseas markets, though it is expected to have a large following in the very active Irish and British wagering market, which commands 49% global market share.
Australia, with only the Sportsbet and Beteasy brands being the only two of note, take up only 15% of the global market.
A Word From The Big Boys
Gary McCracken, chairman of Flutter Entertainment had this to say about the forthcoming merger.
“This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry,”.
“Under Peter Jackson’s leadership (Flutter CEO) we will bring together a management team with the experience required to ensure a successful integration of the businesses, with minimal disruption, during a time of unprecedented change in the sector.”
The announcement, which came on Wednesday 2nd October has caused great upheaval in the UK, where the merger is expected to corral 40% of the online wagering business to the new venture, whilst becoming the largest online wagering business in the world, valued at $10 billion.
It won’t be all plain sailing as there are few hurdles and hoops to negotiate into 2020.
1) shareholders on both sides of the fence need to vote on the merger during the second quarter of 2020.
2) regulators, particularly in the UK will be all over the detail in the months ahead, and won’t make the process easy.
The merger has been driven by what appears to be three key factors in deciding upon a future direction. These are:
1) an increased participation in the North American market (currently it sits at 5% on a combined list of Flutter/Stars Group brands) with an emphasis on new and existing products. These products include fantasy betting, something which hasn’t really taken off in Australia to the same degree.
2) the need to diversify to North America considering the high tax ratios in Britain, Ireland and Australia, as well as regulatory hurdles.
3) the incentive to bring FOX Sports (US) into the equation, after they launched their FOX bet Sports Betting platform in the US last month. This platform also has Stars Group backing as well. The FOX Corp brings to the table Rupert Murdoch’s vast business empire.
There is much to digest, so expect to see more on this story in the weeks and months ahead