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PokerStars Leaves The “Greater China” With The Outcome Beyond Any Possible Doubt

Article by : Helen Sep 9, 2020

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After the merger of Flutter Entertainment and the Stars Group, the management, together with investors, concluded that it was necessary to close the PokerStars brand in China, Taiwan, and Macau.

It seems that right after the merger, the company’s analysts conducted an audit of financial performance for the last six months of 2020. As a result, Flutter has identified several jurisdictions that the company believes should be abandoned. Leaving these markets is one of the vital steps the company is taking to mitigate the negative impact of Covid-19.

Currently, the gambling activities in China, Taiwan, and Macau are still not allowed. Thus, the company plans to reduce operating costs and focus all efforts on developing more promising areas. Official information regarding a possible withdrawal from other markets is still unknown.

Based on the analysis of the interim performance report released last week, we are taking a closer look at the compliance standards and potential market risks for the newly formed group. Although the analysis is incomplete, we already know for sure a few areas that need improvement.

The gambling operator also noted that such steps could bring the company a profit of at least $86.8 million. Most of this amount will be obtained as a result of aligning all procedures and reducing operating costs. The deal, which was completed in May 2020, was worth $6 billion. The companies have agreed in advance on all the terms of the purchase with each of the businesses’ shareholders. After receiving general approval, the agreements that were reached in October 2019 came into force.

After examining the financial results for the first half of 2020, Flutter also announced its commitment to consolidate and migrate all sports betting services to one unified platform used by Betfair’s Paddy Power. Company officials also said there was a lack of investment and funding at PokerStars. If the situation continues at the same level, it could lead to a significant increase in marketing costs for the poker giant.

One of the main reasons for the two gambling operators’ merger was Flutter’s desire to enter the US market more efficiently. The brand planned to continue using FanDuel to offer a unique sports betting service that was legalized in the US in 2019. Also, the Stars Group owned such popular online services as PokerStars, Full Tilt, and FOX Bet. This was to help Flutter maximize its influence and increase its gambling market share in countries such as the UK, Ireland, and the USA. The company has not yet disclosed the potential profit for each of the markets. However, it becomes clear that the bulk of the earnings is expected from the UK market.

Previously, the Stars Group launched a successful marketing campaign with the “I’m in” slogan. The idea was to promote their poker, online casino, and sports betting services under the PokerStars brand. The operator planned to use the global coverage of television advertising. To achieve maximum success, the firm hired one of the most advanced advertising services, Anomaly. The contract for the provision of the relevant services was signed in May 2019.

Our drive to expand the brand global positioning is a result clients’ needs to experience entertainment daily.

The new ad campaign was meant to provide the Stars Group with a rapid influx of customers amid the nascent deal with Flutter Entertainment. Perhaps in this way, the management planned to demonstrate its higher value for the future buyer. Anyway, the deed is done.

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