PokerStars parent company, The Stars Group, has reentered the Australian online gambling market through the acquisition of CrownBet Holdings Pty Limited, the operator of the licensed online sports betting site CrownBet.com.
The Stars Group announced the acquisition of a majority interest in CrownBet last week. Earlier this week, the company announced that it was increasing its stake in the Australian sportsbook from 62% to 80% and that CrownBet would purchase sports betting competitor William Hill Australia Holdings Pty Ltd.
“We are excited to enter the regulated Australian sportsbook market with CrownBet,” said Chief Executive Officer of The Stars Group, Rafi Ashkenazi. “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.”
The Stars Group paid $117.7 million for the initial 62% stake in CrownBet and an additional $315 million to increase its stake to 80% and purchase William Hill Australia. Of that subsequent amount, $234 million in cash went to William Hill Australia with the remainder payable as 3.1 million newly-issued common shares of The Stars Group for the additional equity in CrownBet.
“These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there,” Ashkenazi commented after the announcement earlier this week. “With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
Approval of the Northern Territory Racing Commission and the Australian Foreign Investment Review Board is required before the acquisition of William Hill Australia is finalized. The Stars Group’s additional stake in CrownBet is contingent on that acquisition. Subject to all required approvals, the transaction is expected to close in April 2018.
The purchase of two of Australia’s top online sports betting sites could be the start of a trend, according to at least one online casino review and news site serving Australia. Some analysts predict that further consolidation in the market will occur as smaller companies struggle to conform to new stricter gambling regulations.
Another potential pitfall for smaller operators could come as a result of tax increases that are expected to be announced in the coming weeks. The new tax scheme will seek to impose a point of consumption tax in Western Australia and Queensland . Currently in those regions, tax on bookmakers is assessed based on the jurisdiction that has issued the company’s license. For this reason, many bookmakers, including CrownBet, sought licenses from the The Northern Territory Racing Commission where taxes are less. Under the new plan, the tax rate would be assessed based on the location of the person making the wager and not where the company is licensed.
The reemergence of The Stars Group comes approximately six months after PokerStars withdrew its online poker and casino products from the market in September of last year following the passage of a gambling bill amendment that clarified and strengthened an existing ban on online poker and casino games.