PokerStars Buys 62% of CrownBet, Returns to Australia
PokerStars’ parent company, The Stars Group (Amaya), bought 62% of CrownBet Holdings Pty Limited, one of the largest Australian online bookmakers. The majority shares of CrownBet were sold by Crown Limited, James Packer’s land-based Australian casino giant.
The Crownbet buyout cost Stars Group AUS$117.7 million. The online sportsbooks generated AUS$204 million ($158.9 million) in 2017, a two-year increase of nearly 200% from its 2015 numbers of AUS$76.5 million.
Rafi Ashkenazi, CEO of Stars Group, said in a press release, “We are excited to enter the regulated Australian sportsbook market with CrownBet. 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.”
Matthew Tripp Remains at CrownBet
Matthew Tripp, CrownBet’s founder and CEO, still owns the remaining 38% of CrownBet. According to the press release announcing PokerStars’ purchase, Matthew Tripp will remain with the CrownBet brand to control day-to-day operations.
Matt Tripp gave a significant amount of praise in announcing the acquisition of the company he founded by Stars Group. When the deal was announced, Mr. Tripp said, “We scoured the globe for the best partner for the business and The Stars Group quickly became our number-one target. Their endorsement is a shot in the arm for our business and a sign that we’re tracking well in a highly competitive market.”
PokerStars Returns to Australia
The purchase allows PokerStars to deal itself back in to the Australian gaming market. The IGA 2016 law, passed in August 2017 by the Australian Senate, forced online poker rooms out of the Australian gaming market. PokerStars left Australian on September 11, 2017.
Though Australia’s poker revenues accounted for only 3% of PokerStars global revenues, the company still wanted to remain active in one of the world’s most developed gaming regions. Australians spend more per capita on gambling each year than any other nationality on Earth.
PokerStars Quarterly Revenues
PokerStars’ revenues for the Q3 2017 were US$329,443,000, so even a 3% slice of the pie is a huge amount ($10 million). The CrownBet revenue stream therefore should more than make up the difference.
For its part, Crown Limited continues to retrench. When James Packer returned to Crown’s board of directors in December 2016, he said the company would refocus on the domestic land-based casino industry.
Crown Resorts Out of China
Crown sold most of its shares in Lawrence Ho’s Melco-Crown, which quickly renamed itself Melco International. The divestment came after 18 Crown employees were arrested by Chinese officials for gaming law violations — a scandal which led to the advertisement department workers being detained for 9 months, before release. Part of the deal appeared to be Crown Resorts leaving the Chinese casino market.
The Stars Group continues to either launch or buy online sportsbooks or casino assets. PokerStars owns about 70% of the Internet poker market, so growth in that sector is next to impossible. Instead, Rafi Ashkenazi wants to leverage the PokerStars name by building an online casino and sportsbook network, then driving a certain percentage of those PokerStars customers to their own related gaming sites.
CrownBet to Replace BetStars?
The purchase of CrownBet could have other advantages, too. CrownBet’s sports betting platform might be better than the BetStars platform, which previously was being primed for any possible US sports betting activity. The CrownBet technology eventually might replace the BetStars platform.
Sports punters should know the BetStars/Crownbet comparison is in the real of pure speculation at the moment. No one at Stars Group or Crownbet has addressed BetStars’ place in the combined company at present.
Crown Maintains Betfair Australasia
Crown Resorts has not exited the Australian online sports betting market entirely. Crown still owns Betfair Australasia, a sports betting exchange which continues to operate in Australia. Crown Resorts, which owns famous land-based casinos in Victoria, New South Wales, and Western Australia, appears intent on maintaining Betfair Australasia.