Amaya Outlines Expansion Plan For PokerStars and Full Tilt Poker

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Amaya Outlines Expansion Plan For PokerStars and Full Tilt Poker

On August 15, 2014 Amaya Gaming Group held a conference call to discuss the company’s second quarter results, and during the meeting CEO David Baazov took the opportunity to outline the future direction he hopes to take its two newly acquired iGaming sites, PokerStars and Full Tilt Poker. Amongst the new verticals Amaya envisages for the two iconic brands is an expansion into online casinos, sports books, as well as using the PokerStars brand name to promote land-based poker rooms and live tournaments.

Casino Games

While PokerStars has yet to offer online casino games, Full Tilt Poker rolled out its initial offerings back in January 2014 and although exposure has so far been aimed at a “small subset” of existing players the FTP casino results have thus far been described as “encouraging.” The slow-roll out has been accompanied by no significant marketing drive, and is part of a considered strategy to ensure its casino product is off a sufficiently high quality before further expansion is pursued.

However, its promotional campaigns are expected to be significantly scaled up in the near future as Amaya introduces its brands into new regulated jurisdictions in the last quarter of 2014 and 2015. PokerStars is also expected to soon launch its first casino products in Spain and Italy, and if the poker room then manages to gain successful traction in these market, any previous arguments for limiting casino games to just its Full Tilt brand are expected to soon evaporate.

Sports Betting

Up until now PokerStars has concentrated solely on offering online poker games, a worldwide market worth around $4 billion each year. Amaya Gaming’s plan to add casino games to its gambling mix, however, will give the site access to a further $25 billion market, while its plan to introduce a new sportsbook in 2015 will open up another potential market worth $17 billion. Elaborating on its expansionist strategy, CEO David Baazov, said:

“The focus is to grow the sector. The exciting part of this company [Rational Group Ltd] is that it comes with 86 million customers. Not 86 million gamblers specifically; 86 million customers.”

Good For Poker

Amaya Gaming has estimated around half of its existing poker players also gamble on other verticals, including casino games and sports betting, and so introducing these products is expected to benefit customers by enabling them to earn loyalty points across a single platform. Likewise, Amaya’s expansion plan is expected to help boost traffic on the company’s iPoker sites, PokerStars and Full Tilt Poker.

Regulated Markets Expansion

Amaya Gaming plans further expansion into more regulated markets across the globe, including countries across Europe, Asia, and the Americas. Commenting on issue of regulation, OnlinePokerReport reported David Baazov as saying:

“Both Amaya and Rational Group support the regulation of online poker and gaming, and are committed to working with regulators to create responsible and tax-efficient means to regulate within their jurisdictions. We believe there are important benefits from regulating online gaming operations [including] protecting consumer funds, ensuring game integrity, combating collusion fraud and money laundering, and ensuring responsible gaming processes are in place.”

Amaya Gaming’s Hefty Debt Load

Prior to buying the Rational Group, parent company of PokerStars and Full Tilt Poker, for a huge $4.9 billion, Amaya Gaming was a lesser known technology and gambling software supplying company. Needless to say its recent acquisition has put the business firmly on the radar and squares perfectly with the vision of its CEO and chairman David Baazov, who aims to provide “content to the gaming industry on a common platform across all media..whether physical, virtual, interactive or mobile.”

Forking out such a massive price tag may be viewed as a high risk strategy by some gaming analysts, but the new verticals Amaya is set to introduce, combined with the $1.1 billion in annual revenues the Rational Group already generates, had lead Mr. Baazov to express confidence the acquisition will payoff handsomely for Amaya.

Amaya Gaming Q2 Results

In the second quarter of 2014, Amaya generated $42.5 million in revenues compared to $37.3 million for the same quarter in 2013, and an adjusted EBITDA of $14.3 million, a slight improvement on the $14.2 million reported in Q2 2013. The company subsequently made a net loss of $2.9 million in Q2, compared to a loss of $11.4 million in Q2 2013. As a result of its acquisition of Rational Group, Amaya has now updated its 2014 full year revenue target to between $669 and $715 million, with an adjusted EBITDA of between $265 and $285 million.

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