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PokerStars, FanDuel Owners to Merge in $6-Billion Stock Deal

PokerStars FanDuel

Online gaming giant Flutter, owner of FanDuel and PaddyPowerPoker, has agreed to purchase PokerStars owner The Stars Group for $6 billion in a potentially industry-defining deal.

The all-stock merger deal will see Flutter control 54 percent of the new company. The new Flutter/TSG company will be worth roughly $12 billion at the time of publication.

The merger will have a number of wide-reaching ramifications for the online gaming industry, including connecting FanDuel with Fox Sports. The Stars Group has a deal with Fox to create an online betting app called Fox Bet, which is now available in New Jersey.

The new company will also face significant scrutiny from antitrust authorities as the new company will control nearly 40 percent of the market in certain jurisdictions.

After news of the merger broke, TSG’s stock price jumped 30 percent while Flutter got a significant 6.9 percent boost.

The New Online Gaming Landscape

If the proposed merger between Flutter and The Stars Group goes through, the landscape of the online gaming world will look significantly different.

Flutter, which is based in Dublin, Ireland, has a massive portfolio that includes heavyweight gaming brands Paddy Power, Betfair, Sportsbet, Adjarabet and FanDuel.

Meanwhile, The Stars Group brings the eponymous PokerStars as well as Full Tilt Poker, BetStars, PokerStars Casino, the European Poker Tour and Sky Betting & Gaming.

The Stars Group also brings a unique partnership with Fox Sports to the table. The company developed an online and mobile sports betting app for the broadcasting giant.

The new Flutter/TSG will have some unique opportunities thanks to its diverse assortment of brands. Its primary markets include the U.K., Australia and Ireland but there’s an opportunity for growth around the globe. TSG and Flutter do business in over 100 countries.

The nascent U.S. online gambling market will likely play a big role in the future growth of the company as more and more states legalize online gaming.

Sports betting is now legal in 11 states while online poker is available in three states with a fourth, Pennsylvania, expected to launch any day now.

The Reset Button for PokerStars?

PokerStars has a somewhat special status in the online poker world.

It was one of the first sites that boasted rock-solid security and quickly built a massive player base. The online poker room also played a pivotal role in poker history when Chris Moneymaker qualified for the WSOP Main Event on PokerStars for $80. He went on to become the first online qualifier in history to win the Main Event.

The brand garnered a tremendous amount of goodwill among players when it purchased the floundering Full Tilt Poker in 2012 and paid back players who had been left stranded since Black Friday rocked the U.S. poker market in 2011.

PokerStars’ goodwill with players took a bit of a hit when it was acquired by Amaya Gaming for $4.9 billion in 2014. The site’s new leadership focused on increasing profit and investing heavily in other verticals like casino and sports betting. The site infamously took away its coveted Super Nova Elite VIP program from players in 2015 with no warning.

It remains to be seen how the newly formed company will approach online poker. Sports betting and casino have become more and more important to the bottom line for PokerStars and poker has been somewhat neglected.

The new ownership group could be a breath of fresh air for PokerStars and allow the site to focus more on poker but it also might be more about funneling PokerStars’ massive player base into sports betting and casino products.