Your sportsbook or casino is going the way of your favorite craft beer. First it was unique, independent and yours. Then it was part of a somewhat-like collection, then a larger one, then you’re drinking something Budweiser made.

Your level of outrage depends on your feelings about Budweiser. But you would have been drinking Budweiser all along if that’s what you’d wanted.

The corporate trend of consolidation that has changed how consumers purchase everything from books to toilet paper continued into the American gaming sector on Wednesday. Flutter Entertainment, owners of Paddy Power Betfair and FanDuel, announced a $12 billion all-share merger deal to acquire a majority stake in The Stars Group, creating what would have been the largest corporation in the sector by revenue last year. Flutter will own 55% of the new company, which plans to offer sports betting, fantasy sports and online poker.

The largest online gaming company in the world, which catalogues around four million users globally, would have combined for $4.7 billion in revenue last year. The Stars Group owns Sky Bet and Poker Stars, the largest online poker site in the world. That might and the market access laid out before Flutter is beyond formidable, Daniel Wallach, a lawyer and gaming industry analyst told Bookies.com.

“We'll submit the combined companies as the number one gaming company in the country if not the world,” he said. “So it's basically a race on for who's number two.”

Analyzing the Flutter Entertainment Megadeal

Industry analyst and Gaming USA Corp. president Alan Woinski said the benefits for both principals are obvious, but considers the timing of the deal curious.

“This feels kind of strange because it's something that you would normally see when the industry is mature, not when it's in its infancy,” he told Bookies.com. “Let's look at Stars Group: They have this strong cash flow from their online poker business, but no growth there because online poker has obviously peaked. They just launched Fox Bet, which is kind of their future.

“If they're going to have future growth, it's going to come from that. And the company that really is fighting for number one or number two in the online sports betting space [Flutter, via FanDuel], just acquired them. Now what does that tell you? There's no way they could know if Fox Bet was going to be successful or not. So, it's not like they're buying it because of that existing business. “

In summation, Woinski said: “They're taking out a competitor. Or merging with it.”

Flutter Targets American Sports Betting Expansion

Flutter CEO Peter Jackson said in a release in a release that the move is designed to “turbocharge” expansion into betting markets made possible by the repeal of the Professional and Amateur Sports Protection Act in 2018. It follows a massive redistricting of the United States gambling map from July when Penn National Gaming announced multi-year sports betting and online gaming access partnerships in multiple states with DraftKings, PointsBet and the Stars Group. The impetus for both deals was exploiting a fledgling American sports betting market that currently brandishes 13 states with legal markets in operation.

In that deal, The Stars Group acquired “first-skin” access rights to Penn National properties in Illinois, Indiana – where sports betting is currently underway – Texas and Ohio, and “second-skin” access in Kansas, New Mexico – also underway – Maine, Massachusetts and Michigan.

FanDuel, the market leader in both New Jersey and Pennsylvania, has access to 24 states through deals with Penn National and Boyd Gaming.

Like in the Penn National deal, the Flutter move is filled with permutations for the current and future U.S. market, including new and intriguing partners like Fox, a media company that allied with Stars in May and in September launched the Fox Bet betting platform in New Jersey. The merger allows Fox to purchase an 18.5% stake in FanDuel in 2021, further smudging the ever-hazy line in the U.S. between content and bet providers.

This, Wallach, said, is likely to entice other media companies into the gaming arena, Wallach said. It also makes Flutter an ultra-attractive partner for potential future clients.

“The cross-promotion possibilities are endless,” Wallach said, referring to the reach of FOX Sports. “If you have a casino racetrack in a given market and you're looking for an online gaming partner for distribution points, the access to all the other attributes of this combined company make them a very significant force in a market where they want to operate. That's a huge differentiator for these companies.”

What Will Bettors Notice After Flutter Acquisition?

Government regulators still must approve the deal, a process that can take several months, meaning that U.S. bettors may notice little difference any time soon. But the longer-term question remains whether these mergers, which Wallach said are sure to continue, will benefit consumers.

“What is best for the consumer experience remains to be seen because it's an evolving industry and innovation will be the key, not just size of the company,” Wallach said. “Is it good? Is it good for the consumer to have fewer choices? That's certainly on the one hand a salient question.”

For those not acutely attuned to pricing at various sportsbooks, the difference may only be as noticeable as which operator become more ubiquitous. And in this case, even with Fox in the mix, that figures to be the established brand of FanDuel. The platforms will be part of the same company, but also competitors, and FanDuel, with its strong brand and resume of success as a fantasy and sports betting site, figures to assume the lead for Flutter in the U.S.

That doesn’t mean Fox Bet can’t try.

“I don't think The Stars Group [via the Fox Bet app] is going to slow down their aggressive rollout because they've been very aggressive. You're talking about free play and everything,” Woinski said. “The first two weeks of football season in New Jersey was absolutely ridiculous. The handle is going to be so inflated because of how much everybody gave away, so I don't think that's going to change and, plus, they're not going to do anything until they're sure this thing is going to go through [regulatory approval].

“That being said, down the road, it really depends on how they brand everything, right?”

What Now for the Game Pieces?

The map of American gaming is, literally and figuratively, like a game of Risk. Penn National and Flutter machinations have created partners and merged territories, but key players can — or perhaps must — make corresponding moves as industry observers believe the three or four major companies will dominate the map.

Customers will indirectly be affected by how the rest of the crowded market responds. Business Insider reported on Wednesday that FanDuel rival DraftKings is attempting to raise a $2 billion valuation in preparation of going public. A highly recognizable brand because of its daily fantasy roots and sports betting success, it would figure to be an attractive merger or acquisition target.

Bet365 is a mammoth, family-owned global brand unencumbered by shareholder pressure and in place in New Jersey after soft-launching in September. It would figure to have long-term plans in the U.S. after waiting so long to debut.

William Hill is an 85-year-old company with an established retail brand that must adapt to a betting space, observers say, that is expected to be increasingly dominated by the kind of digital market in which FanDuel and DraftKings have so far exploited.

And then there’s PointsBet, an Australian company with partnerships with Tioga Downs Casino (in New York) and Meadowlands Racetrack (New Jersey) attempting to differentiate itself.

There's also the cadre of sportsbooks and casino companies based in Nevada, such as El Dorado, that once had the legal industry to itself but now is fighting a 12-state front with more states sure to legalize sports betting. Perhaps a deal to improve what industry sources consider their digital shortfall could be the next move.

But for now, part of the industry awaits that next move, and some of the industry plots it.

Bettors will place bets. And maybe have no opinion on the beer.

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