Getting to Know Amaya Gaming: The New King of Online Poker

Thrust in the spotlight following its purchase of PokerStars, Amaya Gaming suddenly became a household name in the poker community, but very little is known about the Canadian-based company.

David BaazovLet’s see if we can shed a little light on the new owner of the world’s largest online poker site by looking into its past, present, and future.

The PokerStars purchase

Since it’s one of the biggest stories in online poker history, let’s start with Amaya Gaming’s purchase of PokerStars, or better stated, its purchase of the Oldford Group, which is the parent company of the Rational Group, which is the parent company of PokerStars, Full Tilt Poker, the European Poker Tour, and several other assets.

The word “game changer” gets tossed around quite a bit in this industry, but with the purchase of PokerStars, the word fits perfectly; it’s a true game changer, and a defining moment for the industry.

The specifics of the deal say as much.

Amaya, a publicly owned company valued at $177 million dollars was able to raise enough capital to purchase a privately owned company for the sum of $4.9 billion — this is known as a reverse acquisition in the industry. This was not merely a historic deal in the iGaming sector, this was a historic deal for any sector.

The ramifications of this deal are hard to even put into words. Consider that Amaya Gaming CEO David Baazov didn’t even make the Top 20 of Bluff’s Power List[i] this year (he probably wouldn’t have made the Top 50 or even Top 100 for that matter), and he will undoubtedly top the list next year.

Speaking of David Baazov …

CEO David Baazov

Current CEO David Baazov is widely considered to be one of the top minds in the industry.

Baazov has been the CEO of Amaya Gaming since 2006 and also acts as the company’s treasurer and secretary[ii].

Baazov also acts as chairman of the board for several of Amaya’s subsidiary companies including Cadillac Jacks and Cryptologic[iii].

Zokay Entertainment CEO Alexander Dreyfus called Baazov and Amaya “ballsy and smart” for making the PokerStars deal, a description that many seem to agree with.

“PokerStars wanted out and it was Baazov who sensed this and made the deal,” Dreyfus told me, adding, “It could have been any company and not Amaya,” but it was Amaya under the leadership of Baazov that made it happen.

About Amaya Gaming

The Amaya Gaming Group is a publicly traded company on the Toronto Stock Exchange and bills itself as offering a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and slot machines.

Before the purchase of PokerStars, Amaya was primarily a B2B company, leasing out their products to other companies. Now it will function in both the B2B and B2C spaces, as it will not only be leasing products but will be operating online gaming sites.

Because of this dynamic there has been talk of a dual stock listing for the company.

Amaya Gaming came into being on January 1, 2004. The company is headquartered in Pointe-Claire in Quebec, Canada[iv].

On July 20, 2010, the company went public (stock symbol AYA).

The initial price of Amaya Gaming stock was around $3, a number that seems almost absurd considering Amaya Stock is now trading at over $26/share less than four years later[v]. And over the years the company has slowly and steadily grown through acquisitions such as Cadillac Jacks.

Amaya has also been on the forefront of legalized online gambling in the U.S., holding several licenses in New Jersey and Nevada and partnered with a number of operators in both land-based and online gambling.

Even before the rumors of a PokerStars acquisition began to swirl Amaya was seen as a strong company with a tremendous outlook. In less than four years Amaya Gaming managed to double its stock value and was considered a thriving company.

Online gambling acquisitions

It wasn’t until the company went public that it really started expanded into the online gaming sphere.

In this short amount of time, Amaya has been steadily upgrading its online portfolio through acquisitions, culminating with the purchase of PokerStars and Full Tilt.

Its first acquisition on this front was the purchase of Cryptologic in December of 2011[vi].

Cryptologic was well-known but somewhat dated online company at the time of its sale to Amaya, but the purchase of Cryptologic allowed Amaya Gaming to gain a small foothold in the online gaming world, and was seen as a first step. The terms of the Cryptologic sale were never made public but are rumored to be in the $35 million range.

Amaya then expanded its online poker client with a second acquisition in October of 2012, when it spent $32.5 million to acquire the OnGame Poker Network from bwin.party[vii] — OnGame was a redundant part of bwin.party’s portfolio after their merger, and will now suffer the same fate with Amaya.

OnGame was seen as a major upgrade from Cryptologic, but still left Amaya as a secondary or tertiary option for operators looking to provide online poker. It was the purchase of PokerStars that turned Amaya into a powerhouse.

What the future holds for AmayaStars

Suffice it to say, Amaya’s future looks extremely bright.

The company is expecting to receive a New Jersey license in the very near future[viii].

Additionally, all of the regulatory bodies that currently license PokerStars have signed off on the deal[ix] and by extension Amaya Gaming, which allows Amaya to expand in both the online and potentially live gaming sectors in these locales.

That being said, there are also plenty of questions that have been raised in the wake of the sale.

Perhaps the greatest concern is if and how PokerStars’ business model will change now that the company is owned by a publicly traded company that has to answer to shareholders. In the past, PokerStars’ owners had carte blanche to make decisions, but this is no longer the case, and now profits and bottom lines must come into play.

Down the road this could mean a paring down of key personnel the company feels are redundant, cuts to customer service or sponsored player budgets, or any number of other cost-cutting measures.

This becomes more of a legitimate concern when you consider the amount of debt the company took on to purchase PokerStars. So, how well will the now debt-laden company balance its commitment and duty to its shareholders (turning a profit and repayment of those debts) with carrying on PokerStars’ tradition of excellence?

The smart money says Amaya will make few changes to what is a well-oiled machine, and will let PokerStars continue to be PokerStars — evidenced by the declaration that the company’s headquarters will remain in the Isle of the Man and all key personnel, sans the founders, will remain in place[x].

Amaya Gaming has also expressed its intent to capitalize on the PokerStars brand and expand into several other markets (this was not a $4.9 billion sale to simply bring online poker to the U.S. after all) with a focus on five key growth initiatives: The U.S., real money, online casino, sports betting, and social gaming[xi].

One thing is for sure, the coming months and years will be exciting.



[i] /news/2013-bluff-power-20-pokers-most-influential-people-39651/

[ii] http://investing.businessweek.com/research/stocks/people/person.asp?personId=107247571&ticker=AMYGF

[iii] http://investing.businessweek.com/research/stocks/people/person.asp?personId=107247571&ticker=AMYGF

[iv] http://www.crunchbase.com/organization/amaya-gaming

[v] http://finance.yahoo.com/q/hp?s=AMYGF&a=09&b=15&c=2010&d=07&e=6&f=2014&g=m

[vi] http://www.crunchbase.com/organization/amaya-gaming

[vii] http://www.crunchbase.com/organization/amaya-gaming

[viii] /news/nj-dge-already-reviewing-pokerstars-license-application-57492/

[ix] /news/amaya-receives-regulatory-approval-for-pokerstars-purchase-59336/

[x] /news/amaya-gaming-acquires-pokerstars-and-assets-for-4-9-billion-56108/

[xi] http://www.onlinepokerreport.com/12831/amaya-pokerstars-investor-presentation-transcript/

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September 2014