PokerStars Owner To Buy Sky Bet for $4.7 Billion

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Saturday, April 28th, 2018 | Written by Stephen Smith

Sky Bet, the sports betting division of Sky Betting & Gaming, is being sold to the The Stars Group in a deal worth $4.7 billion. The Stars Group has owned the world’s most popular poker site, PokerStars, since 2014, with the parent company also owning Full Tilt Poker, an Irish online poker provider and casino since 2004.

This acquisition is one of the biggest takeover bids in internet gambling history, and forms part of The Stars Group mission to branch out and move further into the sports betting field. Without a doubt, the takeover of Sky Bet is huge, and unlike the poker industry, sports betting is much more stable and will provide a major boost to the company’s revenue. This is especially true considering the recently announced news that in 2017 Sky Bet’s customer base had risen by over half a million compared to 2016, with revenue rocketing to around $710 million.

$4.7 Billion Acquisition

The Stars Group, who changed its name in 2017 to The Stars Group Inc, is based in Toronto, Canada and will pay cash and stock to Sky Betting & Gaming’s majority share holder CVC Capital Partners, a private equity firm founded in 1981 as European arm of Citicorp Venture Capital; and also Sky Plc, one of Europe’s leading sports media companies, who sold an 80% stake to CVC Capital Partners in 2015.

The move comes not long after CVC Capital Partners acquired German betting operator Tipico in 2016, which is a Malta based casino and sports betting provider operating in Germany, Austria and Columbia.

Reaction to Deal

The Stars Group has expressed its delight over the acquisition of Sky Betting & Gaming, with CEO Rafael ‘Rafi’ Ashkenazi describing it as a “landmark moment” in company’s history. Elaborating further, Ashkenazi commented:

“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”.

Meanwhile, Richard Flint, who is the CEO of Sky Betting & Gaming, shared similar sentiments to The Stars Group and said that partnering with the world’s most renowned poker brand would brings exciting times and a sense of optimism for Sky Bet.

“We are delighted to join forces with The Stars Group,” stated Flint. “We have had a fantastic last few years and would like to thank CVC and Sky for supporting us in becoming a leading online operator in the UK. This transaction allows us to offer our best-in-class products to a truly global audience. We’re excited about our future together”.

Breaking into UK Market and Beyond

The Stars Group has been looking to break further in to the UK market for many years, and recently failed in a bid to acquire William Hill Plc, which is one of the biggest rivals to Sky Bet. However, this latest deal allows The Stars Group to acquire a significant market share of the UK sports betting market across a variety of fields, including football, horse racing and boxing, which are three of the most popular sports in the country.

Sky Bet (SBG) is currently a multi-million pound sponsor of the English Football League. It was also one of the fastest growing online gambling providers in 2017.

Another reasons why this move is making so many headlines is because it could help The Stars Group establish a stronger presence in the US. The opportunity, however, will depend upon a positive resolution of the Sports Betting case currently sitting in the US Supreme Court that is trying to overturn the Professional and Amateur Sports Protection Act of 1992 (PASPA), and allow for the legalization of online sports betting in the 46 states where it is currently banned.

The Stars Group already has licenses and approvals to operate from 17 jurisdictions including in Europe and North America.

Regulatory Approval Required

Whilst this deal is all but complete, it is expected to close later in 2018 when all customary conditions are approved from authorities that currently regulate the markets. Two of these include NASDAQ, which is the second largest American stock exchange by market cap, and the Toronto Stock Exchange (TSX), one of the world’s largest stock exchanges and 9th in the world.