Stars Group Merge with Flutter to Create World’s Biggest Gambling Giant

The Stars Group, parent company of PokerStars, is set to merge with Irish bookmaking giants Flutter Entertainment to create the world’s largest online gambling operation.

The unexpected news will see Flutter’s CEO Peter Jackson head the new combined betting group as Chief Executive from a base in Dublin, from where Flutter operates its Betfair, Paddy Power, Sportsbet, TVG and FanDuel brands.

Current Stars Group CEO Rafi Ashkenazi will continue in that role in the new set-up, with the merger expected to see annual revenues of close to $4billion.

It is not, as some reports have suggested, a buyout of The Stars Group by its Irish counterparts and news of the all-share deal sparked a sharp share price rise.

Flutter was up 17% in the morning London trading, with Stars’ shares up by 2%, with the merger seeing Flutter shareholders owning 55% of the new company, the remainder going to Stars shareholders.

The deal is not expected to be finalised until the second half of 2020, and some have voiced concern that the merger ‘could face scrutiny because of the large share of the market the combined company would have in the UK and Australia.’

Formerly known as PaddyPower Betfair Plc, Flutter merged with fantasy sports company Fan Duel last year, while The Stars Group bought over Sky Betting and Gaming in a deal worth $4.7billion.

This most recent consolidation within the gambling industry will see Flutter/Stars emerge with a combined market presence ‘about 50 per cent larger than Bet365’s and around double the size of GVC, the owner of Ladbrokes Coral’, according to Morgan Stanley analysts.

Quite what this means for the average Joe in the gambling world is unclear, but the merger is ‘expected to deliver substantial value creation for shareholders from pre-tax cost synergies of £140M per annum, along with potential revenue cross-sell in international markets and lower finance costs.’