STAFF at Yorkshire-based Sky Betting & Gaming are set to play significant roles in the development of the world’s largest online betting firm, after its owner agreed to a merger.
Paddy Power and Betfair owner Flutter Entertainment has agreed a merger deal with Sky Bet’s owner The Stars Group to create a firm with combined annual revenues of £3.8 billion.
The Canadian-based Stars Group took over Sky Betting & Gaming, which has its head office in Leeds, last year. Sky Bet has more than 1,300 staff based in the city and is continuing to grow headcount.
The Leeds-based giant became a unicorn, a term used to describe a billion-pound tech company, when it was acquired by the Stars group.
A spokesman for Flutter said it was too early to comment on the future structure of the group.
However, The Yorkshire Post understands that the Leeds operation will remain very important to the combined group.
Flutter - previously called Paddy Power Betfair - will own 54.6 per cent of the merged firm, which will have its headquarters in Dublin and be listed on the London Stock Exchange as well as on Euronext Dublin.
The tie-up - completed through a takeover of The Stars Group (TSG) by Flutter - will allow the two firms to make savings of £140 million a year, while there will also be potential revenue cross-sell in international markets and lower finance costs.
Flutter chairman Gary McGann will become chairman of the combined group, while Flutter chief executive Peter Jackson will head up the firm in the same role.
Rafi Ashkenazi, chief executive of TSG, will become chief operating officer of the combined group.
If the deal is approved by shareholders of the two firms, it is expected to complete in the second or third quarter of next year.
Following the transaction, Flutter said it will have customers in more than 100 international markets and will gain TSG’s well-known brands PokerStars and Sky Betting & Gaming. Mr Jackson said the deal will “turbocharge” Flutter’s growth strategy.
Mr McGann added: “This is an exciting and transformational combination that will bring together two strong, complementary businesses to create a global leader in the fast-growing online sports betting and gaming industry.”
Mr Ashkenazi said the deal will “position us strongly for the future in this rapidly evolving industry”.
It comes amid a period of unprecedented change in the global betting industry, which has seen a raft of deals in recent years amid the rise in online gaming and regulation crackdowns. James Wheatcroft, an analyst at Jefferies, said it was a “compelling” deal.
“The proposed acquisition of The Stars Group by Flutter Entertainment Plc speaks to the rapidly evolving online gaming and sport betting industry," said Adam McLaren, a Moody's Vice President and Senior Analyst. "Continued growth in the industry, including in the US, is expected and the ability to cross-sell to existing and new customers in poker, gaming, and sports betting through strong brands and partnerships remains key.”
It has also been confirmed by Flutter that Bradford-based Morrisons’ chairman Andrew Higginson has been appointed as an independent non-executive director of the group. He is also the chair of Evergreen Garden Care and a non-executive director of Woolworths Holdings Limited, the South African retailer.
Richard Flint, who turned Sky Betting & Gaming into one of the biggest operators in the gambling industry, is set to return to his Yorkshire roots as he takes on a senior role at the world’s largest online betting firm.
The Stars Group took over SBG, which has its head office in Leeds, last year for £3.4bn. Last year, Mr Flint, the former CEO, was appointed as executive chairman of SBG. He left the company at the end of June but is now set to return as non-executive director of the combined Stars Group and Flutter operation.