Canada’s own Stars Group Inc. has purchased Sky Betting & Gaming for $4.7 billion in a move that will plunge the company further into the online sports betting industry. This move will create the largest public online betting company, which will dominate the market in a high performing, rapidly-growing industry.
Stars Group Inc., based out of Toronto, has until now primarily focused on their operation of PokerStars, but believe they will get around 1/3 of their revenue from sports betting. The Stars Group has agreed to pay $3.6 billion towards the price of closing on its common stock come this April 20th. The company has received financing for their debts to the tune of $6.9 billion towards the cash percentage of the arrangement. Shares for the Stars Group have since skyrocketed, closing in Friday at $29.30 per share, giving them a market value of about $4.2 billion. These shares are up 26% in the last 4 months, and 66% in the last year. These new finances will be used towards the cash percentage of the arrangement, also refinancing Stars Group Inc.’s existing lien term loan to pay for SBG’s unresolved debt.
The CEO of Stars Group Inc., Rafi Ashkenazi, believes is very pleased with this takeover of Sky Betting. He believes it is the “ideal complement” to their already dominating Poker business.
However, Starts Group Inc. originally tried – and failed – to take hold of Sky’s rival, William Hill Plc. But this takeover of Sky Betting will gain the company momentous superiority in the UK market, where online betting is more regulated and legal. While there have been concerns of tighter restrictions in the UK, Sky has performed outstandingly as a primary betting source.
Currently in the US, it is only legal to bet on sports in four states, though there has been recent evidence from a Supreme Court case in New Jersey that might make similar bans unconstitutional. In the meantime, online gambling is legal in Canada, most of the European Union and multiple Caribbean nations.
Other major companies diving into the online betting industry are 21st Century Fox and Comcast Corporation. Both of these companies are also setting up for a bidding war to takeover Sky Betting & Gaming sometime in the near future. Stars Group also plans to requisition a larger part of CrownBet Holdings Ltd. – an Australian based company – who have recently purchased the unit of William Hill in Australia.
Overall, Stars Group Inc. believes this move will be pivotal in jettisoning Sky Betting to one of the biggest companies for online gambling in the world.