With its Acquisitions Complete, The Stars Group Crystallizes Global Sports Betting Strategy With its Acquisitions Complete, The Stars Group Crystallizes Global Sports Betting Strategy
Key Takeaways
  • The Stars Group will tread carefully in the established UK and Australia markets, retaining the existing platforms and brands.
  • The operator will aggressively merge platforms in Italy as a test-bed for other markets.
  • It seeks a media partner in the US to utilize its brand and platform in an effort to replicate Sky Bet’s success in the UK.

Following an intense year of acquisitions that transformed the original poker-first company into a true multi-vertical global gaming operator, the dust has finally settled. All the numbers are in the books, and the operator now needs to justify its spending spree.

Revenue from its three primary gaming businesses—poker, gaming and betting—are close to equally split, with each contributing approximately $180 million in revenue a quarter. The strategy for poker is clear cut: Aim for small, single digit annual growth, dominate new markets as they open, retain its position as the global live and online poker operator in existing markets, and seek to continually attract high value customers.

Meanwhile, the casino sits there on the side, adding regular fresh content and offering its higher-yield gaming options to tens of millions of poker players and sports bettors.

Sports betting however, is a more complex situation. It is TSG’s smallest vertical of the three; yet despite, or perhaps because of this, it dominated both the presentation and the Q&A session during the company’s Q3 2018 conference call earlier this month.

The online sports betting business towers over all other forms of gambling and is thus highly competitive, and regionally nuanced. Putting together the details of its latest financial statements and presentations, TSG’s plan for global growth in sports and its overarching branding and platform strategy worldwide can be pieced together.

It is not a simple strategy, and there is certainly a lot to do. One year ago, sports betting from its in-house, organically grown BetStars sportsbook made up just 3.5% of the group’s total gaming revenue; even in its most recent quarter, sports from its legacy international business was still at just 6%.

That picture has now turned on its head. It has just bought its way to the top of the online sports betting market in the UK; it is third in Australia; and it is a major player in other key European markets. It is also facing a huge opportunity—and intense competition—in the fast-developing United States market.

The Stars Group has three teams at its disposal, four platforms, and even more brands to organize. That is a lot to juggle, and it needs to execute fast. It must reorganize in existing markets and strategize launches in new ones. The plan is four-fold: Its migration plan in Italy, as a testbed for other markets; the US growth plan; its hold-steady strategy in the UK; and its separate plan for Australia.