Stars Group, the company that owns PokerStars, made a surprising decision to purchase the popular Sky Betting brand of online gambling sites for a whopping $4.7 billion.
Private equity firm CVC Capital Partners, the majority owner with a 70 percent stake in Sky Betting and Gaming, will retain a 12 percent share in the company going forward. Minority owner Sky plc, which owned 20 percent in the company after selling off 70 percent of its shares to CVC in 2015, will now have a 3 percent stake.
Acquiring an Internet Gambling Giant
Sky Betting, a Leeds-based internet gambling company, has a plethora of brands: Sky Bet, Sky Vegas, Sky Casino, Sky Poker, and Sky Bingo. The business now owned by Stars Group is most known for its Sky Bet, one of the top sports betting platforms in the world.
Over the past few years, Stars Group, formerly Amaya Inc, has changed its focus from a poker-only business to offering a wide-range of gambling products.
The purchase of Sky Betting is another example of Stars Group, a Canada-based company, shifting its focus away from online poker. PokerStars continues to dominate the online poker market, but its parent company realizes there is more money to be made offering other forms of gambling.
Acquiring the Sky Bet brand makes the Stars Group an instant player in the sports betting world. Sky Bet offers betting on worldwide sports such as Major League Baseball, cricket, NBA, and NFL.
Stars Group CEO Rafi Ashkenazi called the acquisition a “landmark moment” in the company’s history. He says the deal will create the world’s largest publicly-listed online gambling firm.
No Shady Business This Time?
The last time Stars Group (Amaya, at the time) made a major purchase, acquiring Full Tilt Poker in 2014, alleged illegal activity took place between its then-CEO David Baazov and his co-conspirators.
Baazov, who is currently facing trial in Montreal for insider trading, allegedly tipped off investors he had a personal relationship with prior to Amaya’s purchase of Full Tilt Poker, a once popular online poker site that is now defunct.
The former CEO is alleged to have shared insider information with those investors prior to the purchase. The investors then turned around and bought up stock in Amaya weeks before the company bought Full Tilt.
It’s illegal to provide investors with private information that could impact the stock price. Baazov, who has been unsuccessfully attempting to get his case dismissed for months, faces up to 20 years in prison on each of two counts of wire fraud.
Let’s hope the acquisition of Sky Betting was completely legit.