Sportsbet To Absorb Rival Betting Firm BetEasy
Australian betting firm BetEasy will no longer exist after the mega-merger between The Stars Group and Flutter Entertainment completes. Long-term rival Sportsbet is set to absorb BetEast following the successful merger of the two gaming giants.
The Stars Group owns BetEasy while Sportsbet is a Flutter Entertainment brand. Initial plans to run two Australia-facing brands are no longer happening. A spokesperson for Sportsbet explained the decision.
“Flutter currently intends to pursue a single brand strategy for its Australian operation. This is subject to ratification once the proposed combination with The Stars Group is completed. We are now intending to pursue a single brand strategy principally because of the ongoing volatility to sporting competitions around the world and the wider economy stemming from COVID-19.”
“Also, we would be able to execute a single brand customer migration in a shorter time frame, allowing us to focus our attention on providing the best possible experience for our customers.”
Flutter held an extraordinary general meeting on April 22 where shareholders voted on the proposed merger. The results were practically unanimous in favour with 99.19% voting for the merger.
The Stars Group’s shareholders hold their vote on April 24.
A Brief History of BetEasy
BetEasy launched in Australian in 2014 after Matthew Tripp purchased and rebranded the BetEzy brand. Crown Resorts purchased a 66% stakes in BetEasy in December of the same year.
Crown transitioned BetEasy into the CrownBet brand in March 215 where it became a word-first integration of an online wagering operator with a land-based casino operation.
A string of asset sales by Crown Resorts in December 2017 resulted in CrownBet divesting. This raised almost $700 million. This is where The Stars Group’s involvement came in.
It acquired an 80% ownership interest in BetEasy through a series of transactions between February and April 2018. The Stars Group reinstated the BetEasy brand in August 2018. TSG acquired the remaining 20% of BetEasy on December 3, 2019.
Tripp stood down as BetEasy CEO but became a non-executive president.
Sportsbet Outperforms BetEasy in Q1
Both The Stars Group and Flutter Entertainment recently released their Q1 trading figures. They gave shareholders an insight into the damage caused by the COVID-19 pandemic.
Flutter-owned Sportsbet put in some superb figures considering the circumstances. Revenue rose 21% to $109 million thanks, in part, to active customers increasing 16%. Total money stakes improved by 3% while Sportsbet’s winning margins hit an impressive 11.7%.
The BetEasy figures weren’t anywhere near as impressive. They were, indeed, awful. Revenue fell 2% to US$61 million. The Stars Group blame fluctuations in currency for the revenue reduction. Revenue would have increased 6% under constant currency.
Most worrying for BetEasy, and perhaps the reason it and not Sportsbet is being absorbed, is it made a $7 million operating loss. This is an increase of 500%.
Both parent companies have seen a spike in online activity outside of sports betting.
Flutter’s online arm enjoyed a Q1 revenue rise of 9% helped by a 17% rise in gaming. The Stars Group reported a massive 200% improvement in online casino revenue.
Flutter Continues Paying Stood Down Staff From Own Funds
Flutter continues to pay its furloughed staff using its own resources rather than rely on government assistance. The COVID-19 pandemic has caused most UK & Irish business to close or run with much more limited number of staff. Flutter promised to continue paying its staff without assistance “for as long as possible.”
It’s a move that shows the gambling industry in a good light. Gambling companies make millions of dollars per year, sometimes hundreds of millions. Flutter has done what Crown and The Star refused to do and they should be commended for it.