Rising Share Price of Flutter Entertainment Causes Speculation about Upcoming Merger-and-Acquisition Wave in Gambling Sector

Yesterday, the owner of the Paddy Power brand, Flutter Entertainment, said that it knew of no material reason for an increase registered in its shares. However, there has been speculation that another company could be having a big interest in the Irish gambling giant.

A massive surge in the share price of the bookmaker behemoth, which currently has well-known brands such as Paddy Power, Betfair and Australia’s Sportsbet in its portfolio, as well as a growing presence in the US market, was registered. According to Bloomberg, this has been the sharpest one-day increase in the company’s shares since August 2015, while the number of shares traded was three times bigger than the daily average over the last three months.

Other big players in the gambling sector, such as GVC Holdings and William Hill, also saw an increase in their share price, but not to the same extent.

Right away, rumours have appeared that a bid for a takeover of the gambling group has been responsible for the great share price increase. Flutter Entertainment responded to this speculation saying there was no material reason for the surge.

The truth is that no potential buyer has been indicated to be currently discussing a possible takeover of the Irish gambling company, and speculations also left a potential suitor unnamed.

Stricter Regulatory Rules and Increased Costs Make Gambling Operators Seek Consolidation

According to industry analysts, the gambling industry both in the UK and globally would be subjected to a new round of consolidation to follow a recent wave of mergers and acquisition in the sector. The last few years saw Paddy Power join forces with Betfair, which eventually resulted in the group’s re-branding to Flutter Entertainment, as well as the massive merger of Ladbrokes and its rival Coral, both of which were acquired by GVC Holdings.

Apart from that, Flutter Entertainment has also been willing to expand its portfolio by adding new brands to guarantee a great variety of gambling operations. Earlier in 2019, it purchased the leading gambling operator in Georgia, Adjarabet. Apart from that, it has been boosting its operations in the US since the US Supreme Court lifted the federal sports betting ban in 2018.

In June, the Chief Executive Officer of Flutter Entertainment, Peter Jackson, confirmed that part of the group’s growth strategy was associated with purchasing companies which are the leaders in regulated gambling markets around the world.

Considering all of the above-said, some analysts have shared their belief that the sector is preparing for consolidation, as tougher regulatory regime and increasing marketing costs have been making them seek ways to bolster their presence on the market. Many experts had expected that William Hill would be the centrepiece of the corporate merger-and-acquisition activity, especially after last month it became clear that the British bookmaker held talks about a potential merger worth about £6 billion with the US casino behemoth Caesars Entertainment.

  • Author
Olivia Cole

Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.
Daniel Williams
Casino Guardian covers the latest news and events in the casino industry. Here you can also find extensive guides for roulette, slots, blackjack, video poker, and all live casino games as well as reviews of the most trusted UK online casinos and their mobile casino apps.

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