The parent company of one of the nation’s most prominent daily fantasy and sports betting brands made waves last week. The announcement of the Stars Group acquisition by Flutter Entertainment changes the game extraordinarily.
Flutter is absorbing the Stars Group to create the world’s largest gambling company by global revenue. For Indianans, that means sports betting in the Hoosier State could have a dominant operator.
Details on Flutter’s Stars Group acquisition
Flutter’s shareholders will now hold just under 55% of the new company. Shareholders in the Stars Group will own the rest.
Flutter’s corporate headquarters will be in Dublin, while its main listing will be in London. Although the company is more diversified than just sports betting, its sports betting products are of most interest to the Hoosier State.
A third company also benefits from this transaction. Fox Sports, which had already partnered with the Stars Group to produce its own sports betting product, gets in on the deal as well.
Not only will Flutter market Fox Bet, but Fox receives an option to buy up to an 18.5% equity in FanDuel. Flutter is the parent company of FanDuel and now has an interest in Fox Bet as well.
While the interweavings of the business can be hard to understand, the implications are clear. Flutter could control a dominant share of the market in Indiana.
Flutter’s Indiana footprint could grow even larger
As mobile sports betting begins launching in Indiana, FanDuel and Fox Bet could both be active. FanDuel already has two footholds in the state.
Both the Belterra and Blue Chip casinos in Indiana house FanDuel sportsbooks. That means FanDuel will likely be one of the eventual mobile operators as well.
Fox Bet’s inclusion is less obvious but nonetheless possible. The Stars Group has a primary market access deal with Penn National Gaming for Indiana.
It’s unlikely Flutter’s acquisition changes that deal. Penn National operates the Ameristar Casino in East Chicago along with the Hollywood Casino in Lawrenceburg.
Because of that, it’s likely that when Hollywood launches a mobile sportsbook, it will bear the Fox Bet skin. While currently, DraftKings and BetRivers are the only active online sportsbooks in Indiana, there are sure to be other operators coming online soon. The consolidation gives Flutter’s products an advantage.
Why Flutter’s products have a head start on the others
The size of the new Flutter, which would have brought in over $3.8 billion last year, means a lot of investment capital. That translates into a large advertising and promotional budget.
A bigger budget means Flutter might be able to offer better odds to bettors, as well. Better promos, bigger payouts, and more ads could all lead to a bigger market share.
While being able to outspend the competition in many businesses doesn’t always translate to market dominance, it’s a huge advantage in the gambling industry. That’s especially true for online sports betting in Indiana, which revolves around hype.
For consumers, in this case, bettors in Indiana, better promos and bigger payouts could be positive. One operator having too much market share is dangerous, however.
In addition to limiting options bettors have, Flutter’s brands could eventually wield so much market share that they could determine which bets are placed by how they set their odds. While the onus is on the competition to prevent that, consumers can help out by diversifying their bets.
It’s too early to tell what all the ramifications will be. In Indiana, Flutter is ready to cut into the sports betting market like butter.