Flutter Share Price Rises as PokerStars Strategy Shifts

The Flutter share price has risen on the New York Stock Exchange this week following the move away from the London Stock Exchange. This isn’t the only reason that Flutter is in the news this week though, as the gambling giant has also announced a major change to its UK business.

Flutter Entertainment is integrating PokerStars into Betfair from the 13th of August. Following this, it plans to bring the poker product to Paddy Power and Sky Poker later this year. For players, the immediate attraction is greater access to PokerStars and potentially stronger poker liquidity. For Flutter, however, the move could demonstrate something much bigger.

Flutter brings PokerStars to Betfair, Paddy Power and Sky Bet

The first stage of the new strategy arrives this week, with Betfair customers able to access ‘PokerStars on Betfair’ from the 13th of August.

The existing PokerStars UK platform will not disappear immediately, but Flutter's longer-term strategy involves integrating its poker product much more closely with its other UK brands.

PokerStars Chief Commercial Officer Mike Woodbridge has said increasingly fragmented regulation across international markets has contributed to thinner fields and smaller tournament prizes. This integration should create greater liquidity, leading to a better experience for players.

A similar move has already worked with FanDuel in the US, and Flutter’s Sisal and SNAI brands in Italy. After all, putting several Flutter brands into the same poker ecosystem offers more routes into the same underlying player pool.

Why is Flutter consolidating its UK gambling brands?

PokerStars is not the first Flutter business to be brought more closely into the group's wider technology infrastructure.

Flutter said during its latest results that the migration of Sky Bet onto its shared UK and Ireland platform had been completed, while the PokerStars migration was approaching its final stages.

That increasingly points towards a model in which Flutter maintains several powerful consumer-facing brands while consolidating more of the technology sitting behind them.

There are clear commercial advantages to moves like this. Betfair, Paddy Power, Sky Bet and PokerStars can continue appealing to different groups of customers without Flutter necessarily maintaining completely separate systems and products underneath each one.

The company can also potentially introduce successful products from one part of its portfolio to customers elsewhere. PokerStars therefore becomes more than simply a standalone poker site. Its technology, brand and player liquidity can become an asset used across the wider Flutter business.

UK gambling taxes make scale increasingly important

With Remote Gaming Duty increasing from 21% to 40% on April 1, operators have been handing over a substantially larger proportion of their profits in tax. With the remote betting duty set to rise next year, additional pressure is being put on operators to ensure that margins are protected.

A knee-jerk response could be to raise prices or reduce promotions. Perhaps a more intelligent strategy is to run the businesses more efficiently. This is where Flutter has an advantage that many smaller operators do not.

The company already owns several of Britain's most recognisable gambling brands. It also owns the technology, products and customer bases sitting behind them. Instead of building a separate poker proposition for Paddy Power, another for Betfair and another for Sky Bet, Flutter can use PokerStars across all three.

Consolidating in this way reduces overheads, while giving players easy access to one of the most well-respected poker platforms on the UK market.