PokerStars Parent Company Agrees to Buy Sky Betting
The news broke on a Saturday, and it was big. The Stars Group, parent company of PokerStars, announced it will acquire Sky Betting & Gaming for $4.7 billion.
Details, Details
In a press release, in major internet media publications, and across social media, the news made its rounds over the weekend.
The Stars Group acquisition of Sky Betting & Gaming will create the world’s largest online gaming company in the publicly-traded realm. The deal should be completed in the third quarter of 2018.
The price of the deal is $4.7 billion, with $3.6 billion of it to be paid in cash, which is coming from a debt financing deal. The rest will be handled with approximately 37.9 million newly-issued common shares, or about 20% of Stars Group.
https://twitter.com/gamblinglamb/status/987670492390789127
Having received unanimous approval from Stars Group’s Board of Directors, the deal must now await approval from Nasdaq, the Toronto Stock Exchange, and other regulatory bodies.
Quotes from the Parties
Stars Group CEO Rafi Ashkenazi called the deal a “landmark moment” in the company’s history and gives it “great growth potential and will significantly increase our ability to create winning moments for our customers.” He then added: “Following this transaction, the Stars Group will have significantly enhanced scale and a highly-regarded global brand portfolio. As a result, we are well positioned to realize our vision of becoming the world’s favorite iGaming destination.”
And Sky Betting & Gaming CEO Richard Flint noted his delight with the deal. “This transaction allows us to offer our best-in-class products to a truly global audience. We’re excited about our future together.”
The controversial Canadian online gambling giant The Stars Group will be licenced to keep using the Sky Bet name in the UK (unlike with @Crownbet purchase in Australia). They will flog Sky name mercilessly to get a return on $US4.7b acquisition https://t.co/8eWtUMSMLq
— Stephen Mayne (@MayneReport) April 22, 2018
Benefits, According to Stars Group
The press release included a list of benefits that the acquisition will deliver, such as a greater sports betting contingent, increased presence in regulated markets (especially in the UK), more cross-vertical options for poker and sports betting, improved products (casino games, sports book, and mobile apps), and “identified cost synergies of at least $70 million per year.”
Sky Betting & Gaming has incredible name recognition and brand loyalty in the UK. It also claims 80% of its revenue from mobile gaming. Sky is also Europe’s leading sports broadcaster and media company, which will open many new doors for companies like PokerStars to further enhance its own name and customer relationships. In addition, Sky’s annual revenue for 2017 was £624 million and displayed 46% growth over the past two years.
What it Means for Poker Players
There are some key figures that will matter to PokerStars players.
Stars Group’s 2017 revenue was 66.9% derived from poker and 29.3% from online casino and sports betting. In recalculating those numbers to reflect the Sky acquisition, it shows poker comprising only 37% of the company’s revenue, with 60% coming from online casino and sports betting verticals.
Until now, Stars Group had been diversifying into the casino games and sports betting worlds, but poker remained its crown jewel, its base, its core. Going forward, however, the focus will shift considerably to sports betting. And online gaming will be a broader term that encompasses all forms of online and mobile games, with poker only as a part of that. Of course, that part will continue to be significant, but it may not be the priority it once was.
Early opinions are somewhat muted on social media. Many poker players are hesitant that this will benefit PokerStars in any way, but some want to see what industry experts and analysts will say.
The most important thing about this Sky/PokerStars deal is it reunites @SkyPoker 's @Tony_Kendall and EPT commentator @Richard_Orford – who could forget classics like this? https://t.co/SLqD7eMhgt
Worth $4.7 billion IMO
— Barry Carter (@Barry_Carter) April 21, 2018
It is also unclear what the deal means for Sky Poker. The online site has been popular in the UK for many years, and it remains to be seen what will become of the site. Some Sky players are not optimistic.
Hello. Congrats to @PokerStars re. acquisition of @SkyBet but @PokerStars have not acquired Sky Poker then? Why is that?
— Frankie Burrell (@Frankiebuz) April 21, 2018
On poker forums, some posters were concerned that poker will take a backseat to sports betting, and others expressed dismay at the increasing lack of competition in the online poker industry with consolidations and regulatory restrictions. Others are hopeful that Sky Poker will benefit from the move, as long as PokerStars doesn’t scoop it up and take away the uniqueness of Sky.
https://twitter.com/gamblinglamb/status/987997429445390337
