Stars Group Revenue Rises 6.8% in Q2 of 2017

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Saturday, August 26th, 2017 | Written by Shane Larson

The Stars Group, a Canadian major online gambling operator, informed the public recently of its latest financial figures, with the results showing a bright and optimistic healthy year-on-year increase in its performance metrics, and making the business contemplate more acquisition and merger going forward. The Stars Group, once known as Amaya, saw a 6.8 percent increase in its revenue for the three months that were reviewed, putting Q2 of 2017 at $305.3 million.

As a result, The Stars Group is now predicting its revenue to finish in the $1.2 billion to $1.26 billion revenue range by the end of the year. Following the impressive second quarterly figures being released, CEO Rafi Ashkenazi issued a statement praising the company’s performance, stating:

“Our evolution and transformation into The Stars Group continued as we completed our name change and head office move, while our second quarter saw the strengthening of our core senior management team and continued solid revenue growth led by our real money online casino offering. We plan to use this momentum to continue improving and strengthening our business and pursuing our strategic objectives.”

Q2 Results

The $305.3 million generated by Stars in Q2 represented a $19.6 million increase compared to the same quarter in 2016. Furthermore, the groups strategy of diversifying into other gambling games apart from poker has been paying off in a big way, with its online casino and sportsbook posting a huge 50.2 percent increase in revenue to $89.6 million for Q2 year-over-year. On the flip side, revenue generated by online poker noted a 5.9 percent decline for the quarter to $202.9 million, meaning the vertical now represents just 66.5 percent of the company’s revenue, versus a 75.5 percent share in Q2 of 2016.

Australian Exit

Australia recently banned all online gambling activities from the country, and soon after PokerStars sent an email out to its Aussie customers informing them of its decision to exit the lucrative market pending the acquisition of an official iGaming license. As the country currently does not have any body currently set up to issue such licenses, it is anyone’s guess as to how long PokerStars will stay away from the market. In the meantime, any operator seeking to flaunt the new rules stands the risk of having hefty fines levied against them at a rate of more than $5 million per day.

Further Mergers Ahead

Alongside other aspects, The Stars Group has been able to reduce its debts during the first half of the year in order to pay off a balance from the acquisition of the Rational Group, which is a parent company of the PokerStars brand. It has since relocated its base of operation from Montreal, Quebec to Toronto in Ontario. It has also just announced that it is ready to go forward with acquisition and merger opportunities, with the The Stars Group’s CEO saying that he plan to look at further acquisitions of sports betting sites and online casinos. The Stars Group already has established itself as the global leader of online poker, and has been expanding its sportsbook business and casinos as the logical next step in their development.

William Hill Merger?

Only last year, The Stars Group began talking about mergers with the United Kingdom-based gambling operator William Hill, with these two companies talking about the potential manifestation of a £5 billion gambling monster that would run a number of gambling operations across several different jurisdictions. That said, a deal was never agreed because these talks halted quickly, largely in part due to the pressure exerted by William Hill shareholders who did not want to be tied up with a company they considered to be too heavy a financial burden to take on.

Instead, William Hill decided to pursue a consolidation approach in order to improve its struggling digital division, and almost a year following the talks breakdown of the Amaya merger, the operator says that its online business has significantly improved. It has further claimed that it has enough strength to endure the challenges and competition associated with operating within the UK gambling market.

William Hill has a long sports betting history, and the experience that the company has in this sector would definitely have helped The Stars Group, which is relatively new in this area. Given the fact that a merger between the two operators failed to materialize before due to the pressure from the UK bookmaker’s shareholders, the joining of these two gambling behemoths is not very likely. Only time will tell if The Stars Group will follow through with any of the other mergers or acquisitions it has been contemplating.