The Stars Group and Flutter Entertainment combines to form gambling giant

After much deliberation, plans have been made to create a super company within the online gambling industry.

Paddy Power Betfair, recently changed to Flutter Entertainment, negotiated a deal to combine with Poker Stars Owners, The Stars Group. Flutter Entertainment is buying The Stars Group for an estimated $6 billion.

The deal will create a behemoth within the online gambling industry. Flutter is chipping in with well renowned brand names such as Paddy Power, Betfair, and Fanduel. On the other hand, The Stars Group will contribute with brands such as PokerStars, BetStars, and Fox Bet.

Now, all six major brands will be consolidated under under the Flutter Entertainment brand.

US involvement

With its newfound market power, Flutter is expected to set sail in direction of the United State’s rapidly growing online betting industry.

It would be a rational move, in view of the current efforts to deregulate the industry. Each brand is expected to operate independently in the US market.

This “self-competitive nature” has already born fruits across the Atlantic. In the UK, both Paddy Power And Betfair tailor to different demographic groups.

Flutter Entertainment is banking on the continued support for online gambling within the different states. Since the Supreme Court invalidated PASPA, there has been an influx of foreign gambling operators seeking to benefit from the market conditions.

So far, no legal challenges have been able to curtail the market, although the federal government attempted to shut it down last year.

Flutter Entertainment and The Stars Group came to a deal early Tuesday morning.

Corporate giants

2018 was a good year for both Flutter Entertainment and The Stars Group. With combined revenues of $4.6 billion, they control a vast sector of the online gambling sector.

Revenues are expected to climb further as the two groups make inroads in the north American market.

Per agreement, shareholders will combine their shares at a ratio of 1 Stars Group share per 0.225 Flutter Entertainment shares.

Moving forward…

As the online gambling industry continues to grow, more mergers and acquisitions will likely take place in the US market. The underlying goal of such moves is to create market synergies, while lowering overhead costs.