Having a flutter: Sportsbet and BetEasy in huge online merger

The international owners of Australian wagering groups SportsBet and BetEasy will merge, setting the scene for massive tie-up between the country's two largest online bookmakers.

Irish gambling group Flutter Entertainment, which owns Sportsbet, on Wednesday announced it would merge with Canada's Stars Group, which owns BetEasy, in an all-share deal that will create the world's largest online betting company.

The owners of Sportsbet and BetEasy will merge. Credit: Mark Evans

The deal comes at a time of consolidation in the gambling industry in Australia and internationally as operators face stiff competition and tightening profit margins. The BetEasy brand, for example, was born out of CrownBet's takeover of William Hill Australia.

In Australia, online bookmakers have been challenging the Tabcorp-owned TAB, which has a monopoly on retail bookmaking shops, but life has become more difficult for them with the introduction of state-based digital betting taxes.

It is not yet clear how the merger of their parent companies will change how SportsBet and BetEasy operate, and whether they will continue to exist as two separate brands.

Sportsbet chief executive Barni Evans said in a statement that the company was excited about the deal, which would "expand our reach as a global leader in the rapidly changing wagering market".

"Locally, we’re excited about what Sportsbet and BetEasy can achieve through our great people and brands," Mr Evans said. "Right now we’re focused on delivering the best Spring Racing Carnival for our customers."

Flutter said in material released to the London Stock Exchange that the combined offering of Sportsbet and BetEasy in Australia, and the Sky Bet, Paddy Power and Betfair brands in the UK and Ireland, would give it "access to trusted brands with a sustainable base of highly recreational customers".

"The combined group is also expected to benefit from significant cost synergies in its core markets from the integration of operations and enhanced returns on technology and marketing investment," it said.

Flutter said the merger would enable cost savings of £140 million ($256 million) a year, with the potential to cross-sell in international markets.

Following the merger, Flutter previously known as Paddy Power Betfair, will own about 55 per cent of the new company, while Stars Group investors will own the balance.

Stars executive chairman Divyesh Gadhia said the company had "been working relentlessly and passionately" to grow its global business, which included building a "significant presence in Australia through BetEasy".