Flutter Entertainment, the Paddy Power and Betfair owner, has agreed to pay a £60m (€68m) termination fee to The Stars Group if it cannot secure regulatory approval for the takeover of the Toronto-based business.
The all-share deal, announced earlier this month, will create the world's largest online gaming group, partnered with Fox Sports.
Listed in London, it will have a market capitalisation of about €12bn.
The Stars Group has also agreed to pay Flutter £60m if the Irish company's shareholders approve the deal but the Canadian firm's shareholders do not. Details of the agreed break fees are revealed in stock exchange filings by The Stars Group, which is listed in both Toronto and New York.
The move by Flutter Entertainment to buy The Stars Group will give the Irish firm's presence in the United States a significant boost, just as more states continue to legalise gaming.
The planned takeover can be terminated by either side if the deal has not been consummated by the end of October next year. The agreement can be extended for up to six months beyond that date, if the only unsatisfied condition is the receipt of the required regulatory approvals or gaming consents.
Flutter has agreed to pay the £60m termination fee if the merger is not consummated by the end of October next year, if the "condition relating to obtaining regulatory approvals and gaming consents is not satisfied, or a governmental entity has taken an action with respect to the required regulatory approvals… that makes the completion of the combination illegal or prohibited".
Flutter CEO Peter Jackson said that the group intended to leverage Star's experience with Sky Bet in the United States.
The Stars Group acquired Sky Betting and Gaming last year for $4.7bn (€4.2bn).
Flutter has been coy on whether or not it believes the two groups may have to offload some units to get the transaction past regulators.