Flutter Entertainment and The Stars Group’s (TSG) planned online gambling mega-merger has officially earned the approval of Australia’s competition watchdog.
The UK-listed Flutter announced on Tuesday that it had received notification from the Australian Competition and Consumer Commission (ACCC) that informal approval had been granted to the company’s proposed union with PokerStars ‘ parent company TSG.
Flutter noted that both the Australian Foreign Investment Review Board and other foreign regulatory bodies were still subject to approval of the contract. (The statement made no mention of the opinion of the Australian Competition Tribunal on the merger.) Earlier this month, the UK Competition and Markets Authority announced that it was reviewing the agreement to ensure that it did not result in’ a substantial lessening of competition.’
Flutter runs Australian online sports betting provider Sportsbet, while TSG regulates BetEasy online wagering. It is estimated that the two companies control nearly one-quarter of Australia’s online betting industry and thus the proposed Flutter-TSG merger will potentially create the single largest gambling operator on the market (and approximately 15 per cent of the overall business of the merged companies).
So far, there have been no public objections to the deal from any of the online betting rivals of the two companies in Australia. Tabcorp Holdings, which acquired rival Tatts Group a couple of years ago to create a truly dominant land-based wagering business, is probably all too aware of the regulatory bullet it has overlooked in merging these two businesses, so its silence is probably not a surprise.
TSG has said little publicly since the merger plans were announced and the company announced last month that when it releases its Q4/FY19 earnings report on February 27, it would again pass over its traditional call with analysts. That also allows TSG to avoid questions about its faltering online poker product.
Most investors shrugged at the news on Tuesday, pushing Flutter’s shares up 1 percent by London’s close of trading, while TSG’s shares are currently up about 2 percent on the Nasdaq exchange.