The FTSE 100 owner of Paddy Power and Betfair said the Australian Competition and Consumer Commission had granted informal approval for the merger.
The deal will now await the green light from the Australian Foreign Investment Review Board as well as other international regulators including the UK’s Competition and Markets Authority.
Flutter and Stars agreed an all-share merger in October that, if completed, will create the world’s largest online betting and gaming operator, with combined revenues of £3.8bn and total market capitalisation of more than £11bn at current share prices.
Flutter shares were up 1% at 8,612p in early deals.
--Adds share price--