The Stars Group and Flutter Entertainment have finally received clearance regarding their merger from the United Kingdom regulators. After being granted necessary licenses by the regulator, the two business ventures can continue with their already proposed $12.2 billion-worth merger which once completed will create the largest online gambling and betting business globally. This combined group is expected to have net revenues worth around $4 billion in normal working environments.
Before being granted necessary licenses to proceed with the merger talks, the companies involved wondered whether the Competition and Markets Authority would demand that some The Stars Group and Flutter Entertainment brands be sold before the CMA approved the business deal. Fortunately for the companies involved, the CMA concluded that fans of online betting activities residing in the United Kingdom would have enough choice after the merger deal is completed. Furthermore, the Competition and Markets Authority also concluded that the merger will not worsen the overall offering to gamers who bet online.
Findings of the Competition and Markets Authority
In its latest research regarding the proposed merger between The Stars Group and Flutter Entertainment, the Competition and Markets Authority has found that online gambling firms compete strongly for their customers while the United Kingdom betting market is packed with a number of small and large online sports betting operators that offer their services here. The CMA has also found out that there the merging companies would leave space for those smaller operators to proceed with their activities which finally prompted the regulator to allow the two companies to complete the merger.
It should be noted that this was the last fundamental regulatory hurdle for the proposed merger deal as The Stars Group and Flutter Entertainment have been already granted necessary permissions by antitrust regulatory authorities in Canada, Austria, Germany and the United States where The Stars Group is based as well as in Australia where both sports betting operators enjoy a great reputation and have a great share of the entire betting market.
Being granted necessary licenses in the United Kingdom was definitely the toughest obstacle to come across. Speaking of the online betting market in the United Kingdom, The Stars Group and Flutter Entertainment-owned brands together account for over forty percent of the United Kingdom’s online sports betting market as well as around twenty-six percent of the overall online gaming market in the country. Before being granted necessary licenses, some experts believed that Flutter Entertainment may have to sell some of its brands to appease the Competition and Markets Authority.
Several Smaller Regulators Still to Approve the Merger Deal
However, the companies’ merger deal has been approved while the two have managed to keep all of their brands. According to Flutter Entertainment officials, there are still several smaller regulatory bodies that need to approve the company’s merger deal. They also added that this could be postponed due to the global coronavirus crisis. However, the company’s officials also added that the crisis will not jeopardize the merger deal.
In one of the company’s press releases, the officials said that the deal will not be sabotaged despite the massive economic shock related to the cancellation and postponement of sports events across the globe. All in all, Flutter Entertainment will be more affected by the coronavirus crisis as the majority of its revenues come from online sports betting while The Stars Group makes the majority of its gaming revenues from online casino and poker games.