Amaya Shareholders Approve PokerStars Deal; What Happens Next?

pokerstarsamaya

On July 30 at the annual Amaya shareholders meeting, all resolutions concerning the purchase of the Rational Group, parent company of PokerStars and Full Tilt Poker, were given the official go.

Of course, nobody expected a different outcome.

Amaya games have already been running on Full Tilt Poker and Amaya Gaming, now called Amaya Inc., has been officially planning its future as owner of the largest online poker brands for months.

It’s the end and the beginning of an era. But what are the implications? PokerListings Germany's Dirk Oetzmann takes a look.

Massive Share of Online Poker Market

PokerStars and Full Tilt Poker have a combined share of 66% of the online poker market worldwide excluding the US. The next largest brand is 888poker with 6%.

Before Black Friday the two poker sites possessed about 80% of the market in the US. Globally, 85 million people are registered on the two platforms combined.

The purchase also includes the live tournament series run by the brands including the European Poker Tour, Asia-Pacific Poker Tour and Latin America Poker Tour.

PS market share
Impressive piece of market share.
 

With this official decision the doors are now open for the Amaya Group to complete the takeover. It's the third of three conditions set up for the transaction.

The whole process should be finished by the end of Q3 2014.

Only a few days ago Amaya had received “all required approvals from the gaming regulatory authorities that currently license Rational Group Ltd.”

Amaya also announced it had been given the green light from the Toronto Stock Exchange to enlarge its transactions in the stock market.

Doors Open for Return to US Market

These are some of the most important statements for poker players:

1) Amaya Gaming buys Olford Group Ltd, owner of the Rational Group, which in turn owns and operates online poker brands PokerStars and Full Tilt Poker, for $4.9 billion.

This is by far the largest takeover in the industry and Amaya has become the biggest player.

Don’t forget that the Ongame Network with skins like Betsson Poker, Betsafe, Heypoker, Redbet and RedKings, is also part of the Amaya group.

Amaya also acquired Cryptologic in 2013, one of the biggest manufacturers of casino software.

scheinbergs
End of the Scheinberg era.
 

2) PokerStars will not offer other games than poker. Full Tilt is already running Amaya casino games. These will expand in numbers in the future.

3) Mark and Isai Scheinberg, the CEO and founder of PokerStars, respectively, will step down from their positions.

This is a lot more than just re-allocating some positions. The Scheinberg family stepping down marks the end of an era but on purely economic grounds they are the ones connected to DoJ trials, FBI investigations, charges of money laundering and “bad actor” behavior.

With their exclusion possibilities for PokerStars/Full Tilt to return to a regulated US gaming environment could change drastically, beginning with entry to the New Jersey market.

Goal: Stay the Market Leader in Online Poker

These are some of the goals stated by Amaya Inc. in its official investor presentation.

Poker: Become and stay the market leader in online poker, retain industry-leading customer service, security and choice. The poker services will explicitly not be affected by the acquisition.

Casino: Expand recently launched casino games. Full-featured casino client anticipated this year.

Sportsbook: Supposed to launch in 2015, including mobile version.

Social gaming: Expand PokerStars Play on Facebook.

General: Re-enter the US market as quickly as possible, get ahead of the competition in the newly emerging, massive markets in Asia.

pokerstarsplay
PokerStars Play will be a player in SM.
 

What Does It All Mean for the Future?

What does all this mean for the future? Here's a few scenarios:

On Online Poker

Removing Mark and Isai Scheinberg from the Rational Group’s executive will allow gaming regulators in the US to let PokerStars/Full Tilt back into regulated markets.

Given the circumstances surrounding their Black Friday indictments their continued connection to the companyhad become an “impediment for this popular brand to once again be available to players in regulated US jurisdictions.” (John Pappas, Executive Director of the PPA).

The New Jersey Division of Gaming Enforcement has already been in negotiations with Amaya Inc. for several weeks.

If successful Amaya will also look to move into Nevada and Delaware, where regulated markets are also already in place. California is on the horizon.

Although US players might, in the short run, not be able to play against international opponents they will finally get legal access to online poker’s market leader again.

Without a doubt, this would result in another boost for online poker in the US.

On Live Poker

With the US market slowly opening up again Amaya will likely get involved in the live tournament scene and start a new North American series.

On the flip side, that could mean the schedules for series on the other continents could get cut down.

First signs of this: It looks like the EPT is going to lose even more of its stops although the second half of the new season schedule has not been published yet.

On Online Gaming

Amaya expects the global casino gaming market to reach around $3.5 billion in 2015 while the online betting market is estimated to be around $17 billion per year.

With the extreme brand awareness of PokerStars/Full Tilt basically all online casinos and sportsbooks will be on their heels to make sure they don’t get swallowed up in what could become an Amaya avalanche.

On Social Media

amaya shares development
Good time to be a shareholder.
 

Social poker giant Zynga has not officially taken any measures regarding the takeover but it is obvious that PokerStars Play, with its newly monetized play-money offerings, will become a serious contender.

Particularly because mobile poker is on the rise and PokerStars is already in a leading position when it comes to mobile apps.

The first ramifications of the recent developments are already visible.

Good Time to Own Amaya Stock

Even if you are not into stock trading you might want to take a look at this one.

Amaya Gaming shares had been hovering around $5-6 until April 2014. Then they slowly began to climb to $10 until June, when they suddenly jumped to twice that value after the purchase of the Rational Group was announced.

On the day before the shareholder meeting, the shares breached the $30 mark for the first time. That’s a growth of over 500%.

At the same time shares of 888holdings and bwin.party have lost 10-20% of their value. Zynga has lost half of the value since March.

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