Shalom Life | July 01, 2014

Amaya Gaming Becomes Online Leader With $4.9 Billion Deal

The Montreal-based company will buy Oldford Group, operator of PokerStars and Full Tilt Poker.

By: Sarah Bauder

Published: June 13th, 2014 in Business » World

Amaya Gaming Becomes Online Leader With $4.9 Billion Deal

Montreal’s Amaya Gaming Group is set to become the world’s largest online poker company with the recent purchase of Oldford Group, parent company of the Rational Group Ltd.

The deal, announced on Friday, will see Amaya Gaming paying $4.9 Billion US to secure the operator that oversees popular poker brands including PokerStars and Full Tilt Poker. Oldford Group’s poker brands have over 85 million registered players on desktop and mobile devices, and have reportedly dealt more than 100 billion poker hands since launching 14 years ago.

“We believe the combined company will be a global online gaming powerhouse in a large and growing global online gaming market,” explained David Baazov, chairman and CEO of Amaya Gaming.

According to The Vancouver Sun, the online gaming market is estimated to grow by more than $13 billion US, reaching $42 billion US for 2018.

As a result of Amaya Gaming’s announcement, the company’s shares skyrocketed more than 40 percent, peaking at $20.20 before falling back down to $19.77 on the TSX (Toronto Stock Exchange).

The deal between Amaya Gaming and Rational Group followed a year-long courtship, and is expected to ease the latter’s entry into the United States, which has been a major issue as the result of legal problems regarding executive Isai Scheinberg.

Scheinberg was accused, along with 10 other online gambling executives, of fraud, money laundering and illegal gambling in 2011 and continues to remain under indictment in the U.S.

Although PokerStars agreed to pay $731 million US to settle Justice Department charges in 2012, without admitting wrongdoing, it didn’t solve their problems are many states have since moved to legalize Internet betting. However, Amaya Gaming has a strong relationship with several state regulators through slot machines sales.

“We anticipate Amaya’s track record in the United States has the potential to facilitate a speedier entry into the U.S. for Rational’s brands,” Baazov told analysts.

Global Maxfin Capital Inc.’s analyst, Ralph Garcia, describes the deal as a “clean solution.” It is also anticipated that this deal may clear up the Scheinberg family name.

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