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The two giant gambling operators will become the largest on the market, after the deal.
The owners of Paddy Power Betfair [3] and PokerStars have agreed on an all-share deal which will create the largest online gambling company in the world.
Flutter Entertainment (formerly known as Paddy Power Betfair) and The Stars Group(TSG) the company behind PokerStars will be combined - the companies announced on Wednesday. The shareholders of Flutter will own about 54.64% of the new company, while the TSG shareholders will own about 45.36%.
One of the key factors behind the decision is the relaxation of rules on sports betting in the US. Current CEO of Flutter, Peter Jackson will hold this position in the new company as well. According to Jackson, that the deal will “provide world-class capabilities across sports betting, gaming, daily fantasy sports, and poker, as well as greater geographical and product diversification.”
[3]
The company merged its US business with the fantasy sports company, FanDuel last year, while Betfair and Paddy Power merged in 2016.
TSG, on the other hand, acquired Sky Betting & Gaming last year [4] in a $4.7 billion deal. After the announcement of the Flutter/TSG deal, the shares of the former went up 15%, while its biggest rivals GVC (the company owns partypoker) and William Hill also increased their value.
Details of the companies long-term strategy haven't been disclosed. Whether Betfair players will be migrated to PokerStars or they will remain the part of the iPoker Network is yet to be seen. This deal could also be the reason behind the recent job cuts at TSG which saw the company parting ways with over one hundred employees.