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Gaming Report: Stars Group Discreetly Conducted Merger Talks With Paddy Power Betfair, Turkey Cracksdown on Illegal Online Gambling & More

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  • Attreyee Khasnabis February 4, 2019
  • 6 Minutes Read

According to the latest update in the gaming world, the rumours surrounding Stars Group’s secret talks with Irish bookmakers Paddy Power Betfair regarding a possible merger have been doing the rounds with both companies neither confirming nor denying the possibility of a merger.

The Eurasian nation of Turkey launched a full-fledged crackdown on illegal online gambling which involved around 5,000 police officers across 40 provinces and resulted in the arrest of approximately 394 individuals.

Bookmakers Paddy Power Betfair seems to be in the thick of things. Apart from rumours regarding a deal with the Stars Group, the company also acquired a 51 percent stake in the Georgia-facing iGaming company Adjarabet marking its entry into Georgia’s market.

Owner of Las Vegas Sands, Sheldon Adelson donated nearly half a million dollars to help U.S. President Donald Trump’s aides caught up in a legal probe. According to latest updates coming in from the U.S, Adelson contributed $500,000 to the Patriot Legal Expense Fund Trust last Friday. Adelson is known to oppose online gambling in the country and has been lobbying hard to have it deemed illegal.

Lastly, Sweden, like the United Kingdom, is on the cusp of banning gambling ads during live sporting events, according to the Swedish Minister of Civil Affairs Ardalan Shekarabi.

The Stars Group Discreetly Conducted Merger Talks With Paddy Power Betfair

The parent company of PokerStars, the Stars Group, was in discreet talks with Irish bookmakers Paddy Power Betfair regarding a possible merger late last year which would have created a company worth £8.4 Billion.

Stars Group & Paddy Power Betfair

Paddy Power was an Irish bookmaking company founded in 1988 in Dublin and following their merger with online gambling company BetFair in 2015, the companies were re-branded as Paddy Power Betfair. The merged company was recently fined £2.2 Million for failing to protect customers who had gambling problems, with their anti-money laundering checks also heavily criticised.

The UK government’s crackdown on problem gambling, has made the UK market leaders vulnerable to a takeover and the Stars Group was quick to take advantage of the fact. Plans to close hundreds of high street stores, as well as serious and ongoing UK Gambling Commission investigations involving some operators means that there may be rich pickings for Stars Group in the near future.

However, on the matter of the secret discussions held between Paddy Power Betfair and Stars Group, both companies have neither confirmed nor denied the rumoured talks.

Turkey Launches Crackdown on Illegal Online Gambling

The government in Turkey has launched a massive crackdown- the largest ever in the country, on illegal online gambling. Last week on Friday, media reports from Turkey informed that the Cybercrime division branch of the Istanbul Security Directorate had launched simultaneous raids involving 5,000 police officials across 40 provinces. The raids were aimed to nab 394 identified offenders, 207 of whom were reportedly based in Istanbul.

Turkey Gambling

The move comes just weeks after the country announced that it was seeking a new technology partner for its state-run sports betting operation. It is being surmised as being a result of an investigation that identified 72 front companies that were claiming to deal with cosmetics, food and travel but masking different illegal gambling operations.

According to reports, the online betting and gambling sites that masterminded these fronts were reportedly handling wagers equal to TRY3.5 Billion ($671 Million) via 4,345 local bank accounts.

In the raids made so far, the Cybercrime division has seized cash in different currencies i.e. TRL 42 Million, $94,000 and €133,000. Even as the investigations are currently underway against the arrested people who are likely to face prison sentences in addition to fines, another 455 people who were customers of these illegal operators will be levied fines of up to TRY 35,000 ($6,700).

Gambling outside the state-run SportToto and Milli Piyango is banned in the country. Despite this the official figures of ongoing illegal gambling in Turkey place the numbers at $11.4 Billion every year.

Notably in July 2017, the Turkish government had announced that it would be running a two-year national legislation led offensive against illegal gambling operators in the country. The measures outlined included internet monitoring, banning of gambling advertisements, punitive fines on illegal online online operators and amendment of the current legislation.

A number of high-profile enforcement operations were run as part of the offensive, including a major crackdown right before the 2018 FIFA World Cup.

The Turkish government plans to boost SporToto’s annual sales to TRY 17 Billion ($3.1 Billion). This year in January, a tender was opened for a technology partner that could help streamline SporToto’s land-based and online operations.

With the recent crackdown, the government seemingly aims to check illegal gambling and channel the customers to its own state-run sports betting and lottery operations.

Paddy Power Betfair Expands in Georgia

Paddy Power Betfair has acquired a majority stake of 51% in Georgia’s biggest online gaming firm, Adjarabet. The betting giant is reported to have clinched the deal for £101 Million.

Paddy Power Betfair

Adjarabet holds 40% share of the gambling market in Georgia. It currently offers iGaming products, online poker, sports betting and an exchange where gamers can bet against each other. The company also has business presence in Armenia. Last year the company booked a profit of £20 Million and £64 Million in revenue.

CEO of Paddy Power Betfair, Peter Jackson said, “This bolt-on acquisition is in line with our strategy of establishing podium positions in attractive online markets. Adjarabet’s leading brand presence and strong management team has established it as the clear number one in the fast-growing, regulated online Georgian market.”

Paddy Power Betfair has been on an expansion spree in recent years. In May 2018, it took over the popular sports betting platform FanDuel. For the company, the US is a market it is treading carefully into. Jackson had in October 2018, reminded the company’s board members that the country’s market is still very volatile.

The betting major is now looking to add diverse and global assets to its portfolio, and has trained focus on Europe. Acquiring Adjarabet surely seems a big part of this plan.

“In Europe, our focus is on returning the Paddy Power brand to growth, and I’m encouraged by the initial benefits from our improved product offering following the migration to the new software platform,” Jackson said.

Sheldon Adelson Gives $500K to Trump Aides’ Legal Aid

Casino giant Sheldon Adelson who is fiercely opposed to online gambling has donated nearly half a million dollars to help U.S. President Donald Trump’s aides caught up in a legal probe. Last Friday, ABC News reported that Adelson, who owns Las Vegas Sands contributed $500,000 to the Patriot Legal Expense Fund Trust.

Sheldon Adelson
Sheldon Adelson

The Trust was set up in February 2018 to help Trump associates that are involved in special counsel Robert Mueller’s ongoing investigation into Russian interference in the 2016 Presidential election. Adelson made the donation jointly with his wife, Miriam Adelson. This is the largest contribution that anyone has ever made to the Trust. Casino industry veteran Phil Ruffin had earlier given $50,000 to the Trust.

The casino mogul is also reported to be one of the bigger donors to past Republican campaigns. After the 2016 election, Adelson donated $5 Million to Trump’s inaugural committee. Following this in November 2018, Trump awarded Miriam the Presidential Medal of Freedom.

Although Adelson has claimed that he became a Trump supporter after the President’s support for Israel, the recent donation becomes relevant in light of the fact that he has, for years, canvassed for Congress to pass legislation known as ‘Restoration of Amercia’s Wire Act’. The Legislation has sought to rescind the 2011 opinion by the U.S. Department of Justice (DOJ) on the 1961 Wire Act.

Now that the DOJ has recently issued a new opinion on the Wire Act that reverses the earlier DOJ opinion and includes other forms of online gambling other than sports betting under the restrictive diktat of the Act, Adelson’s lobbying in the country’s political circles seems to be working.

Sweden Maybe Looking to Ban Gambling Ads During Live Sports

Following the example of the United Kingdom, the European country of Sweden may also ban gambling ads during live sporting events.

Sweden Gambling

On February 1, Swedish media outlet Aftonbladet quoted Minister of Civil Affairs Ardalan Shekarabi as saying that he didn’t want to “exclude” the possibility that Sweden may follow the leads of other nations looking to minimize the potential harms of gambling by limiting operators’ ability to market their products to sports fans.

Shekarabi further elaborated that Swedes were increasingly “tired of the extremely aggressive marketing, the unrestrained advertising.” Shekarabi said Sweden’s new gambling licensees “have a huge responsibility and must ensure that they live up to the requirements and intentions” of Sweden’s new gambling laws.

However, Sweden’s new gambling regime is yet to define what constitutes excessive marketing. Shekarabi conceded that more time was needed to determine “where the limits of moderation are set,” while warning that “further tightening will be required if this proves necessary.”

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