PokerStars Sends Amaya Revenues Soaring To C$368m In Q4 2014

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Thursday, April 2nd, 2015 | Written by Charles Washington

While PokerStars remains locked out of the US iGaming market, the operator continues to dominate the online poker industry around the world and in the fourth quarter of 2014 helped send the revenues of its parent company Amaya Gaming Group Inc soaring to C$368.6 million. That figure represents a huge tenfold increase from the $37 million reported for Q4 a year earlier, although the company’s $26.7 million net loss was still four times bigger than the $6.8 million loss posted in Q4 of 2013. However, not including discontinued operations and items which have been sold, Amaya Inc saw its adjusted net earnings rise to $85.7 million for the quarter, up from the $11.1 million posted in Q4 2013.

Record Revenue Come From PokerStars B2C Business

A massive 80% of Amaya Inc’s record revenues was generated by its business to consumer (B2C) operations, most of which came from online poker room PokerStars, which the Canadian company acquired for $4.9 billion last year, along with other Rational Group assets. The company has also announced further plans to grow the business around the world, with a specific focus on the lucrative Asian market, and as Amaya CEO David Baazov, explains:

“PokerStars intends to continue to grow its core poker business through geographic expansion, new and innovative marketing campaigns, including exciting global celebrity endorsements and promotions, and continued innovation in games and technology to improve the consumer experience and attract new players to the game and our other offerings.”

Other Offerings Aside From Poker

Amongst the other offerings alluded to by David Baazov are casino games, including blackjack, roulette, and slots, which Amaya added to PokerStars gambling mix late last year, in the process breaking with a decade of poker-only tradition. The Montreal-based operator said it also plans to expand into other areas of the gambling industry, such as sportsbetting, through strategic acquisitions, as well as organic growth, and as Baazov said in a statement:

“We anticipate the launch of sports betting in certain markets in the coming days with an expansion across the network to take place through the first half of 2015.”

Part of Amaya’s consolidation strategy could involve the acquisitions of bwin.party for a possible $1.2 billion, news of which was announced last November after bwin.party released its disappointing revenues results for 2014. These figures included a decline in revenues to €611.9 million from €652.4 million in 2013, and an operating loss of €94.3 million after tax, compared to a €41.1 million profit in 2013. Nevertheless, the talks are ongoing, and as bwin.party non-executive chairman Philip Yea told the Financial Times recently, “These processes take whatever time they take.”

Amaya Agrees To Sell Cadillac Jack

In order to focus more fully on its B2C core division offerings in the fast-growing internet gaming market, Amaya has said it will sell some of its B2B assets, including slot machine manufacturer Cadillac Jack. News of the subsidiary’s sale to Apollo Capital Management for C$476 million ($375 million) was announced at the end of March, with the deal expected to be completed by the end of this year. The news was not unexpected, though, as Amaya had previously indicated it intended to offload Cadillac Jack following its takeover of the Rational Group for $4.9 billion.

The New Jersey Question

China and India account for roughly a third of the world’s population, or 19.24% and 17.50% respectively. As well as pivoting its business towards the hugely important Asian market, Amaya is also eager to return to the US regulated iGaming market, having previously been forced to exit the country of 319 million, equal to 4.45% of the world’s total population. Following more than a year of license application delays, that aspiration may soon become reality and recently Baazov optimistically announced PokerStars was expected to enter New Jersey’s regulated poker market in the third quarter of 2015.

A NASDAQ Listing

While Amaya appeared on the Toronto Stock Exchange back in 2013, David Baazov has announced the company is also currently seeking a NASDAQ listing, as befitting its position as a global gaming giant. As the Amaya CEO explains:

“[In order to] further our position as a leading global, online consumer technology company, we recently applied to list our common shares on the Nasdaq Global Select Market, and currently anticipate providing an update on the status of such application in the near future.”

Following announcement of the news, Amaya Gaming stocks are presently trading 4.17% higher at $31.47 per share on the TSE.