The Stars Group acquires majority stake in CrownBet
Deal could help the Pokerstars owner launch a sportsbook in the US, according to analysts
The deal sees Stars team up with the CrownBet management team, led by founder and CEO Matthew Tripp, to complete the purchase from parent company Crown Resorts.
Such a deal was first announced back in January although the identity of Stars Group as major investor was not revealed.
“We are excited to enter the regulated Australian sportsbook market with CrownBet,” said Rafi Ashkenazi, Stars Group CEO.
“CrownBet has become one of the fastest growing online sportsbooks in Australia through its strong management team, proprietary technology, mobile app, unique partnerships and market-leading loyalty program.”
CrownBet is one of Australia’s fastest growing online sportsbooks with unaudited annual revenues growing from approximately A$76.5 million in 2015 to approximately A$204.0 million in 2017 and unaudited EBITDA turning positive for the first time in 2017 at approximately A$7.9 million for the year.
Under the terms of the agreement, Tripp will continue to lead the company, while Stars is entitled to appoint a majority of the directors on the board of directors.
Cannacord Genuity analyst Simon Davies noted “CrownBet does own its own sportsbook platform (albeit, a somewhat restrictive one), and has a highly experienced and incentivised entrepreneur/founder, who’s skillset could be useful as Stars attempts to develop its own sports offering. This could be particularly important if the US legalises sports betting later this year.”
The Stars Group’s appetite for regulated sportsbook revenues has been well documented in the past, although William Hill has often been mooted as the most likely target, in part thanks to the hire of former Hills executive Robin Chhabra to lead Stars’ M&A strategy.
Stars and Crownbet do have some links however, with the Canadian firm hiring Christopher Coyne from Crown back in September 2017.
Paul Leyland from Regulus Partners noted: “The CrownBet acquisition is relatively limited strategically [in structurally growing sportsbook] given the highly ‘bespoke’ nature of Australian betting (mostly domestic horseracing, no in-play) and the inability to cross-sell gaming (with proprietary technology possibly a mixed blessing outside its core market).
The transaction continues a busy period of M&A in the Australian sportsbook market following some regulatory changes, with William Hill Australia also in the midst of a sale process.