Keeping the Stars from the Sky: CMA steps in on Stars Group and Sky Bet merger

IGT 167 COMPANIES SKYBET
BetInvest LB
Share this article
  • 3
  •  
  •  
  •  
  •  
  •  
  •  
  •  

The Stars Group has completed its acquisition of leading UK betting operator Sky Betting and Gaming in a deal worth $4.7bn.

The purchase, first agreed in April with then-owners CVC Capital Partners and Sky PLC, sees the Canadian operator become “the world’s largest publicly listed online gaming company.”

“This acquisition represents a pivotal moment in The Stars Group’s evolution,” said Stars Group CEO Rafi Ashkenazi.

“[It] dramatically improves The Stars Group’s revenue diversity, creating a balanced spread across poker, casino and sportsbook with a broad geographic reach.”

SBG recently posted 2017 revenue of $685m, a 38 percent increase on 2016’s total, with customer numbers rising 31 percent to 2.6 million. The growth continued for H118, with revenue climbing 58 percent year-on-year to $278m.

Not only will the acquisition add significantly to The Stars Group revenue, the addition of SBG’s sports betting, casino and mobile portfolio will also increase the company’s customer base and range of verticals.

“SBG’s mobile-focused sportsbook pairs well with our industry-leading poker offering to create two premier customer acquisition channels,” said Ashkenazi.

“We believe this combination along with our combined online casino offerings positions The Stars Group for continued growth in the evolving online gaming industry.”

However, the completion announcement omitted to mention that the Competition and Markets Authority served both companies with an enforcement order on 6 July to prevent the integration of SBG into The Stars Group until it had completed an investigation into the deal.

The two firms are not to share staff, commercially-sensitive information, intellectual property, supplier lists “or any other information of a confidential or proprietary nature relating to either of the two businesses.”

The UK regulatory authority released the initial enforcement order under section 72(2) of the Enterprise Act 2002, with the order itself stating the CMA predicted a “substantial lessening of competition” following the merger.

“The Competition and Markets Authority has reasonable grounds for suspecting that… arrangements are in progress or in contemplation which, if carried into effect, will result in The Stars Group Inc. and its subsidiary Stars Group Holdings Ltd ceasing to be distinct from Cyan Blue Topco Ltd, which controls the Sky Bet & Gaming group of companies.”

The CMA states no specific timetable for the resolution of the investigation, however the CEOs of both companies must provide statements of compliance with the order every fortnight, starting 24 July, before the potential initiation of a formal Phase 1 investigation.


Share this article
  • 3
  •  
  •  
  •  
  •  
  •  
  •  
  •  
Greentube Asian Fortunes LB