U.K.-based betting behemoth Flutter has agreed a blockbuster deal to merge with Canadian online gaming company The Stars Group, it was announced Tuesday.
Flutter, formerly known as Paddy Power Betfair, unveiled the merger in a press release on Tuesday. The announcement saw stock prices for the two companies soar to more than $12 billion.
The headline-making deal will see the creation of the world’s biggest online gaming company, a new entity that will be a “global leader in sports betting and gaming" according to the organization’s announcement.
Once merged, the companies will boast more than 13 million active users in more than 100 international markets; a customer base that could generate seismic shifts in the online gaming industry.
Though it is well known for its online poker operation PokerStars, Canadian gaming company The Stars Group is also behind some of the industry’s other biggest brands including Full Tilt, No Limit Hold’em Championship and the European Poker Tour.
While poker has long since been a mainstay of their operation, the company has also been making major moves in the online gaming space of late. In July last year they acquired Sky Betting and Gaming in a deal worth $4.7 billion in order to increase their sports betting capabilities. They also partnered with Fox Sports to manage the newly launched Fox Bet mobile sports betting platform.
Commenting on today’s announcement, Rafi Ashkenazi, CEO of TSG said: “This exciting combination will allow us to enhance and accelerate our existing strategy. In recent years, we have transformed TSG from a single product operator in poker, to a diverse global leader with multiple product offerings across poker, gaming and sports betting. The combination with Flutter will further enhance our company’s core strengths, and position us strongly for the future in this rapidly evolving industry.”
The new online betting company will be based out of core markets in the U.K., Ireland and Australia, but perhaps most exciting of all is the potential expansion opportunities it opens up in the U.S. market.
The race to offer sports betting products across has gathered pace across the U.S. since the Supreme Court struck down the federal ban on sports betting in May 2018 by overturning the Professional and Amateur Sports Protection Act of 1992.
In the months since 13 states have entered the sports betting business with states such as Arkansas, Delaware, Mississippi, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island and West Virginia among those joining the newly legalized ranks.
That has led to a growing demand for companies to offer online sports betting and gaming solutions, a niche that Flutter and TSG’s newly formed betting giant will be looking to fill.