In a $6 billion deal, two powerhouse online gaming companies plan to come together next year, changing the world and Pennsylvania’s online gambling markets.
Flutter Entertainment, which includes Paddy Power and Betfair brands as well as FanDuel Group, which includes TVG, numberFire, and FanDuel Sportsbook PA, are acquiring The Stars Group, which is known for PokerStars, Sky Betting & Gaming, and the recently launched Fox Bet.
The combined mega-company will be valued at approximately $11.3 billion, making it the world’s biggest gaming company. It will operate as Flutter Entertainment Plc., based in Dublin, Ireland.
FanDuel rules PA and NJ online markets
FanDuel began as a daily fantasy sports brand in 2009 but expanded into sports betting following the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PAPSA). FanDuel moved into the New Jersey sports betting market in 2018. It is currently the top online sportsbook in Pennsylvania and New Jersey.
The FanDuel Group has verticals operational in 40 states.
Fox Bet is new to Stars but leverages Fox Sports
Fox Bet came about after Fox Corporation bought into The Stars Group in May, intending to create a gambling company intertwined with the Fox Sports brand.
Fox bought a 4.99% stake in Stars in May for $236 million.
Fox Sports has an option to purchase up to 50% of Stars’ business in the US within the next decade. Under the acquisition deal, Fox now has the right to buy 18.5% of Flutter’s business in the US at its 2021 market value.
The FanDuel and Stars brands in Pennsylvania
Both FanDuel and Fox Bet are aggressively advertising and marketing, which should continue even after the merger.
The distinct brand identities should also remain and expand into new US markets. Experts believe they serve different market segments.
In Pennsylvania, the two companies are involved in the following projects, most of which have yet to launch in the state:
- FanDuel Sportsbook
- Valley Forge online casino
- Mount Airy online casino
- Fox Bet
- PokerStars PA
“We’re going to run a dual-brand strategy,” Matt King, chief executive officer of FanDuel, told Bloomberg.
It’s a proven model in the betting space. If you look at Paddy Power and Betfair in the UK and Ireland, both of those brands compete against each other but they also attack different parts of the marketplace. We think there is a complementary nature between FanDuel and Fox Bet.
Expect a move to a single online platform
The venture will create a group operating on a single platform, a huge competitive advantage.
FanDuel’s current platform has rave reviews. No details on the single platform plan came with the acquisition announcement.
According to Dustin Gouker, an analyst with Legal Sports Report:
Everyone else in the space in the US will struggle to keep up with the combined assets — and will — of the new Flutter/FanDuel Group in the US.
Fox Bet expects the combined online sports betting, online casino, and online poker markets could be worth $9 billion by 2025.