One of the biggest news stories in the gambling industries over the last few months was the announced merger of Flutter Entertainment and The Stars Group. Flutter Entertainment is the owner of both Paddy Power and FanDuel, and they form one of the biggest sportsbook operating companies in the world.
The Stars Group owns PokerStars and SkyBet, and they were looking to break into the growing sports betting industry. Those two companies announced a merger that was worth $12.2 billion, and there was a worry that the coronavirus pandemic would slow the merger down.
Both companies recently announced that this crisis wouldn’t slow down the merger, and they have taken positive steps in the last few weeks.
While The Stars Group will not be largely affected by the coronavirus pandemic, the same cannot be said for Flutter Entertainment. Flutter Entertainment makes more than 75 percent of their money from the sports betting industry, and sports are currently shut down for the time being.
Flutter Entertainment has sent out a memo to their investors and shareholders to warn them of the potential financial impact of the coronavirus, but they are planning on this merger taking place.
The Stars Group was in a position to back out of the deal, but they have maintained that they are fully on board with this merger. Both companies believe that the merger will help them get through the financial crisis that the coronavirus pandemic has caused.
Industry leaders also believe that a major “bounce back” is coming to the sports betting industry, and this merger will help them in an even bigger way. The only real setback is that the merger is waiting on some regulatory approvals, and those might not occur during the pandemic.
UK Antitrust Regulators Approve Merger
One of the biggest hurdles that this merger needed to overcome was to gain approval from United Kingdom antitrust regulators. Both companies were hopeful that the regulators would approve of their merger, but they finally got their answer on Wednesday.
UK antitrust regulators approved of the merger, which will allow for the two companies to create the biggest online gaming group in the world.
The main reason that the regulators would need to approve this merger is to determine if there would be enough competition in the market after this merger was approved. The Competition and Markets Authority determined that this merger would not create a monopoly on the market, and they voted to give their approval.
The merger is expected to bring in more than $4 billion in revenue per year, although those figures will be much less until the sports world is able to resume.
Both companies were fearful that the United Kingdom antitrust laws would prevent this merger from happening, and this was considered to be the toughest hurdle to clear. The merger was approved in Australia, which is where both companies currently have a large share of the market.
The Stars Group is based out of Canada, and those regulators gave their approval to the merger as well. Both companies also received approval from the United States, Austria, and Germany as well.
Another important factor of these approvals is that the merger was not changed by any of the antitrust agencies. The merger is still not completely clear, as there are still some other antitrust agencies that will have to approve the deal.
These agencies are much smaller than the major companies that have already reviewed the deal. It is unclear when those decisions will be made, as the coronavirus pandemic will likely slow the process down for a few weeks, or months.