In many industries, market dominance is tied to companies’ ability to market themselves. The recently announced Stars Group acquisition by Flutter increases that ability for one of the prominent operators in the daily fantasy sports and sports betting industries.
FanDuel, which is owned by parent company Flutter Entertainment, is one of the brands that could see a boost in value because of this merger. That could leave the competition scrambling to keep up in New York.
Details on Flutter’s Stars Group acquisition
Recently, Flutter announced it had acquired the Stars Group in a stock-only deal. Flutter shareholders would control almost 55% of the new company.
In terms of revenue, Flutter is now the largest online gaming company in the world. The combined revenue from Flutter and the Stars Group last year was $3.8 billion.
While the company holds stakes in other prominent gambling brands like Fox Bet and PokerStars, the brand most people are familiar with is FanDuel. Residents of the Empire State recognize FanDuel in two ways.
Not only is FanDuel one of the two most popular DFS brands, but it operates the retail sportsbook at Tioga Downs Casino in upstate New York. Because of that, the merger could affect both gambling operations.
Among those effects could be a huge increase in promotions due to increased investment in the brand.
How the merger could buoy FanDuel’s business
Not only does the merger secure FanDuel’s future in both industries, but it gives Flutter a greater amount of investment capital. That could translate into different results.
More capital means a greater ability to buy advertising over several mediums. That means New Yorkers could start seeing more ads for FanDuel on their social media feeds and websites they visit and hear more spots on the radio.
Television is a likely medium for an increased ad-buy as well. FanDuel’s presence on television, however, could increase without Flutter having to spend a dime.
Fox Sports had an existing partnership with the Stars Group before the acquisition. The deal with Flutter hasn’t changed that.
Flutter now owns a significant stake in its Fox Bet property, but there is a potential ramification for FanDuel as well. Fox has an option to buy as much as an 18.5% stake in FanDuel.
If Fox invests in FanDuel, that creates a natural incentive for Fox to not only allow advertising during its programming but also mention FanDuel games and odds during its broadcasts. The exposure would be great for FanDuel.
It also ups the ante for the competition in New York. FanDuel’s new resources make it more powerful.
How the acquisition could make FanDuel dominant
With more capital, FanDuel may simply be able to offer better odds at Tioga Downs than the other New York sportsbooks can. That could also take the form of more frequent promotions or superior registration bonuses.
On the DFS side, the increased capital could lead to more frequent promotions or superior registration bonuses as well. FanDuel could also increase prizes or tweak its games in new ways.
Competitors could at the very least feel pressured to keep up, and possibly struggle to do so. If that happens, FanDuel could become the dominant DFS operator and sportsbook in New York.