Combine the various aspects of the stock market with a spontaneous gambling industry, and one will have all the volatility they can handle in a single day. However, recent reports show that numbers from Paddy Power Betfair will give shareholders something to smile about. Paddy Power, the sports betting giant based in Ireland, officially completed its merger with the online gaming establishment Betfair in February of 2016 to form the largest site for gambling in the world. The move was seen as an incredibly smart move by many investors, and stocks are now reflecting this as the newly-minted conglomerate has moved in to Britain’s FTSE 100.
Due to ever-changing economic environments and the increase in taxes on online casinos and sportsbook, the idea of mergers is nothing new to the gambling industry. More fees and harsher regulations on these companies have led to deals happening across the board, such as Coral agreeing to a merger with Ladbrokes and Bwin.Party joining forces with GVC. However, the stocks analyst Questor states that now is a better time than ever to buy.
A major factor that points to the future success of Paddy Power and Betfair working together as one is that their respective players are virtually exclusive. The lack of overlap in customer traffic means that the new venture will barely be affected by inflated revenue. This comes from the diverse reach that both companies had, with a clientele that spans across the globe. Both companies have a combined presence in over 100 countries. Additionally, with an annual £1.3 billion coming in from total revenue, the new company will have no problem expanding its campaign.
Because many individuals enthusiastically jumped on board immediately following the announcement of the Paddy Power Betfair merger, some investors are still wary of the company’s true value and have been approaching it cautiously. This prudent process is also backed up by the strain put on other large sites due to the ongoing transformations in the gambling industry. With that being said, the investing power and diverse branding that Paddy Power Betfair offers is a sign that the company is poised to come out on top.