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Amaya Gaming’s Reverse Acquisition of PokerStars and Full Tilt Poker

Posted by :admin On : June 13, 2014
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Amaya PokerStars and Full Tilt Poker SaleThe rumors proved true. Amaya Gaming and PokerStars announced the deal via a press release late in the evening of June 12.

Amaya will acquire Oldford Group, parent company of Rational Group, which owns and operates PokerStars and Full Tilt Poker. The agreement is worth $4.9 billion.

The deal includes all issued and outstanding shares of Oldford, and all of the assets associated with the company. PokerStars and Full Tilt Poker alone have more than 85 million registered players on the online poker sites, with PokerStars by-and-large the biggest Internet poker entity in the world.

Figures included in the press release show that the pro forma combined revenue for Amaya and Oldford in 2013 was $1.3 billion, and the EBITDA was $474.8 million. Adjusted EBITDA, before interest, financing costs, taxes, and other costs, was $473.8 million, and that estimated adjusted EBITDA for 2014 (back-dating to January 1, 2014 for the buyout) is $600 million to $640 million.

Some estimated the worth of PokerStars to be more alone than the $4.9 billion sale price of Oldford, but the exclusion from the United States market dented that worth and may have reduced the price to one that worked for both parties.

Amaya didn’t have $5 billion cash on hand for the transaction, but a $50 million deposit started the deal. The Blackstone Group will assist in financing some of the debt, as has an unnamed investment manager. A combination of cash, new debt, subscription receipts, common shares, and preferred shares will be used to complete the sale.

Business as Usual, Mostly

Despite the size and scope of the deal, not to mention its possible impact on the global and United States gaming markets, business at PokerStars, Full Tilt Poker, and Amaya Gaming is said to be moving forward as usual. Players on the gaming sites will not see any change in their day-to-day activities.

PokerStars and Full Tilt Poker will continue to offer the same games to the same markets, for the time being.

Tours like the European Poker Tour, Latin American Poker Tour, and UK & Ireland Poker Tour (just to name a few) will operate with PokerStars as their sponsor without any changes to their respective live event schedules.

The Rational Group will continue working from its Isle of Man offices, as well as current sub-offices, and Amaya will stay in its Montreal headquarters.

Amaya and PokerStars Management Shuffle

There are a few people involved in Rational Group that will see a change. In fact, that change is an integral part of the agreement and one that will likely give Amaya a better chance to offer online gaming services to more states in America.

Oldford Group founder and Chief Executive Officer Mark Scheinberg will sell all of his company shares to a subsidiary of Amaya, as will other Oldford shareholders. Scheinberg and several other executives will resign from their positions and leave the company altogether.

The exit of Mark and Isai Scheinberg is a key component for PokerStars to gain entry into New Jersey. Though Amaya has a fully executed and valid license, its new agreement with PokerStars will need to be reexamined.

Since PokerStars’ license application was on hold due to the pending US Department of Justice indictment against Isai Scheinberg, this move may signal a new chapter for Amaya, PokerStars, and New Jersey Internet gaming.

Speaking of Regulated Markets

The press release specifically addressed the entry of PokerStars and Full Tilt to regulated markets and named the United States as the most pertinent.

“Amaya believes the transaction will expedite the entry of PokerStars and Full Tilt Poker into regulated markets in which Amaya already holds a footprint.”

Quite a few states have bad actor clauses in place or prepared for upcoming legislative opportunities, but many in the online gaming industry hope that the Amaya deal will shine a new light on “bad actors.”

The Poker Players Alliance was quick to praise the buyout with respect to the positive effect it may have on PokerStars and the regulated US market. “Amaya’s acquisition should remove any perceived impediment for this popular brand to once again be available to players in regulated US jurisdictions,” said PPA Executive Director John Pappas.

He went further to explain his hope that the news “will bring the gaming industry together – tribes, commercial casinos, card rooms, lotteries, and others – to push as a united front for state and federal legislation that licenses and regulated Internet poker.”

Affiliate Marketing Details Released by New Jersey Regulator

Posted by :admin On : June 12, 2014
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Affiliate Marketing Online Gambling In NJThe online gaming affiliate industry was a thriving market in the United States before the UIGEA and Black Friday, and it has yet to gain much ground at all since the regulation of online gaming in New Jersey.

The primary reason is that affiliate marketing had yet to be thoroughly addressed by the New Jersey Division of Gaming Enforcement. Affiliates had been awaiting further instruction for months before an official document was released on June 9, 2014.

Licensing of Internet Marketing Companies Overview

The Director’s Advisory Bulletin was issued from the State of New Jersey and signed by DGE Director David Rebuck. It aimed to address the licensing of Internet marketing companies, better known in the industry as affiliates.

Two licenses are available for the entities – vendor registration or ancillary casino service industry enterprises. Compensation dictates the type of license required.

For instance, if affiliates are paid a flat fee for directing traffic to an online gaming site, they require a vendor license. An ancillary license is for companies who are paid based on player activity on those sites.

Vendors

The vendor registration license is for companies paid a certain fee when a user clicks on a banner or link for a New Jersey gaming site, based on how many people view a particular advertisement, or for an official partnership.

This type of license also applies to affiliates taking a flat fee for sign-ups, deposits, site downloads, or a particular number of bets or amount wagered.

Ancillaries

Affiliates must request an ancillary casino service industry enterprises (CSIE) license if pay is dependent upon gaming action. For instance, if an affiliate is paid a percentage of every deposit or a fee based on the amount of money a player wins or loses on the Internet gaming site, the ancillary license is required.

Revenue share revenue is also a determinant for an ancillary license, meaning the affiliate is paid a percentage of the net gaming for a user.

Sub-Affiliates

The document from the DGE goes on to discuss sub-affiliates, which are entities that are paid by the primary affiliate for referring players to a particular online gaming company. The bases for sub-affiliate licenses are the same as indicated above for vendors versus ancillaries.

Sub-affiliates must submit their contracts with primary affiliates to the DGE for the proper license. Should a sub-affiliate fail to obtain the proper license and file the necessary paperwork, the DGE can take regulatory action against that company as well as the master affiliate. Licenses could be revoked for failing to comply with all of the requirements.

Allowances

The DGE also details some of the allowances for affiliates in New Jersey. One of those is the ability to use a “refer a friend” application for which an affiliate takes a flat fee. Should an affiliate receive less than $2,500 per calendar year for this service, no license is required for that operation.

Affiliates are also allowed to switch compensation models as long as they remain in the same licensing class. While those changes require the DGE’s approval, they may be implemented without preapproval.

Requirements

All affiliates, no matter the license held, must submit a monthly report for the DGE’s Service Industry Licensing Bureau and Intake Unit. The documents must include details of all monies changing hands for any type of activities. License holders and platform providers must comply.

Lastly, all affiliate activity must take place in and be conducted with customers in the state of New Jersey. Any violations can result in the revocation of a license or other regulatory action deemed appropriate. The exact rules are given to the affiliate upon the completion of the licensing process.

The Inside Scoop – California Love & a Big Week in NJ

Posted by :admin On : April 25, 2014
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Category: Home Page Strategy, Inside Scoop

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poker affiliate Inside Scoop Column

I typically publish this Inside Scoop column on Wednesdays, however this week the poker Internets were buzzing with news about California, so I took a few days to absorb it all.

So let’s get started!

California’s Online Poker Hearing

If you’re a part of the online poker media, or someone interested in U.S. online gambling regulation, there’s a good chance that you were glued to your laptop on Wednesday afternoon listening to the testimonies being given in front of the Assembly Committee on Governmental Organization. And don’t worry; if you missed the hearing, you can listen to it here.

So here are the cliff notes:

On Wednesday, many of the biggest names in regulated gambling came together to give hours of testimony both for and against regulated online gambling in California.

Much of the discussions focused on the collaboration and consensus amongst the various Indian tribes throughout the Golden State. The largest point of contention is without a doubt the inclusion or exclusion of the bad actor clause.

What is the Bad Actor Clause?

The term “bad actor” refers to any online gaming company that continued to accept wagers in the U.S. after UIGEA (Unlawful Internet Gambling Enforcement Act) was passed in 2006.

It is each individual states decision to place a bad actor clause or not in any bill. All three states that currently have regulated and legalized online gambling in the various forms all have different bad actor clauses in their legislation.

Speaking of bad actors, PokerStars……….

One of the most interesting parts of the day happened during the third panel session when news emerged that PokerStars just put a press release out to the public.

The press release disclosed that PokerStars had officially partnered with not only the Morongo Band of Mission Indians, but also California’s largest card rooms; Bicycle Casino, Hawaiian Gardens Casino, and Commerce Club.

To sum it all up in one sentence, this would be PokerStars “Battle of the Alamo” moment in history. Stars knows good and well that if they miss the boat in California, their hopes of doing business in the regulated U.S. markets will become even more of an uphill battle.

And with California presenting a market over 4 times larger than that of New Jersey, don’t expect Stars to give up without a relentless fight.

A few of the best write-ups I have found regarding California, bad actors, and PokerStars are listed below:

California Gambler

Hearing Wrapup

24 Things We Learned at the California Online Poker Hearing

Online Poker Report

PokerStars Big Announcement

Summary of CA online poker hearing

New Jersey Poker Online

PokerStars California presence and it’s impact on New Jersey

A big week In New Jersey for poker

While all the attention has been focused on California this week, New Jersey has been rocking and rolling with their own excitement. The World Poker Tour’s championship $15,400 buy-in event sponsored by nj.partypoker.com has been going on every day at the Borgata Casino Hotel & Resort.

With a $5 million guarantee, this event has made history in New Jersey, as it’s the first time in its 11-year tenure that the event has ever been held outside of Las Vegas. Without a doubt, this goes to show the significance of regulated online gambling in New Jersey.

In addition to the WPT’s richest annual event, the nj.partypoker.com NJCOP (New Jersey Championship of Poker) has also been underway. With 15 events, this series guaranteed New Jersey online players over $600,000in prize pools throughout the week.

Many industry analysts and followers are watching both these events closely, as it appears that the New Jersey online poker market may be stagnating a bit.

Check back to this column next, as we will analyze both of these events in New Jersey, as well as report on any new developments in California. And after such a busy week following the California market, it only makes sense to end the column and head into the weekend with this song.

The Inside Scoop – March Madness & Updates On The Regulated U.S. Markets

Posted by :admin On : March 12, 2014
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Inside Scoop Column

Welcome to the new home of one of my favorite columns to write each week, The Inside Scoop!

With PAL and PAS being so closely knit these days, it only made sense to move the column over to PAL. So keep an eye on this area every Wednesday for the latest juicy gossip and commentary from the online gambling industry. We have a lot to cover this week, so let’s dive right in!

PAL March Madness Bracket Contest – $500 Added

It’s that time again, one of the best months of the year; March.

Not only is spring right around the corner, but so is one of the largest betting periods of the year in the US. It’s March Madness folks, and with that comes great opportunities for affiliates to capitalize on all the betting action taking place surrounding this tournament.

As expected, this year PAL is once again hosting an NCAA Bracket Contest that is FREE to enter. We have added $500 cash to the prize pool courtesy of our good friends at Chipsplit.com and CarbonSports.ag.

The payouts will be 70/20/10, and as always this bracket is interesting because we give underdog points for those games you win where you don’t pick the favorite. You can visit the official 2014 PAL NCAA Bracket Contest thread for all the information, and to talk a little smack with fellow PAL members.

Full Tilt Remission Process Paid Out Over $80 Million

For past Full Tilt players, March proved to be a great month. Finally after years of waiting, several players have been reimbursed their players funds from the Full Tilt cashier.

With over 27,000 players being reimbursed, Chris Grove over at Online Poker Report published an interesting article showing that U.S. facing poker sites saw growth of around 5% in the week immediately following remission payments. Read more here

And for the love of God, I really hope none of this growth was at Lock Poker, you know, the U.S. facing poker site still in business that owes players over $900,000. Speaking of Lock Poker, one of my most speechless moments was when I read that Lock actually just launched a new skin. Read more and feel free to share your thoughts in this PAL thread.

New Jersey February Numbers & Is California Next To Regulate?

Earlier this afternoon, the New Jersey Division of Gaming Enforcement (DGE) released the official February revenue numbers for the states land based and online gambling operations.

With an 8.9% monthly increase, February online gambling in the Garden State generated revenues of $10.3 million. It should also come as no surprise that Party / Borgata still lead in market share, primarily fueled by their strong casino revenues. OPR’s post today displays the numbers in easy to digest graphs.

New Jersey is still seen as test market for the rest of the country. Obstacles such as geolocation issues, as well as payment processing continue to plague online gambling in the Garden State.

Overall, what is most impressive to me is the continued month over month growth, especially from the casino side of the business.

California?

For months now, many of us following the regulated markets in the U.S. have been speculating on which state would be the next to follow Nevada, New Jersey, and Delaware to become the 4th state in the country to regulate online gambling. While it’s impossible to have a crystal ball and say for sure, many analysts are predicting it will be California. It already has two bills proposed in the state legislature.

And what a market this would be! With a population of over 38 million people, compared to New Jersey’s 9 million residents, California would be an entirely new animal.

Unlike other states, California would have zero issues with liquidity, and would more than likely become on of the largest online poker markets in the world. The question now becomes, who will the casinos and operators be in the California online poker market?

That remains to be seen. One thing is certain though, all eyes will be on California for the remainder of 2014.

Interested in writing a guest column or post for PAL? Now’s your chance to become a contributor in one of the industries largest poker affiliate communities. We’re looking for writers to share their industry experiences or knowledge. To be considered, send Jeremy an email or PM in the forums.

Borgata Online Gaming Revenue Grows 15% in January

Posted by :admin On : February 12, 2014
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borgata-poker-online-

 

LAS VEGAS – FEBRUARY 12, 2014 – Boyd Gaming Corporation (NYSE: BYD) today announced the following results from Borgata’s online gaming operations in the month of January 2014.

Combined, Borgata and partypoker generated $3.9 million in online gaming revenue, giving the network a market-leading 41% total share of New Jersey’s online gaming business.  Borgata accounted for $2.7 million in revenue, a 15% increase over December 2013.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, said:

“Our market-leading performance is testament to the quality of our online product and the power of the Borgata brand.  These results also once again demonstrate online gaming’s potential to expand our business. About 85 percent of our online players have not had rated play at Borgata in at least two years, showing there is little overlap with our land-based business. Online gaming is growing our database, creating a long-term opportunity to market Borgata to an entirely new group of customers.”

Tom Ballance, President and Chief Operating Officer of Borgata, said:

“As we continue to refine our technology, we believe there is significant upside to our business.  In January, Borgata launched a mobile gaming app for iPhones and iPads, and we are scheduled to roll out a version for Android devices shortly.  As Borgata expands into mobile gaming, we believe we will further grow our business and the overall market.”

– Borgata/partypoker Network Maintains Market Lead with 41% Share –

– Borgata Generates $2.7 Million of Online Revenues, 29% Share –
 

The New Jersey Effect On The Un-Regulated U.S. Poker Market

Posted by :admin On : February 3, 2014
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MergeLast week, news broke that the Merge Gaming Network announced it would no longer accept new players or allow existing players in New Jersey and Delaware to play for real money on a number of it’s sites.

Immediately following this abrupt announcement, speculation began to mounting across the various player’s forums on the internet. Whether it was a legal issue, a specific threat, or strictly a precautionary measure, it still is unclear to exactly why Merge withdrew from these states.We reached out to an operator on the Merge network, and this is what we were told:

“To our knowledge, the network (Merge) leaving NJ and DE had nothing to do with any existing legal threats. It was more than likely done strictly out of precaution. It would also not be surprising if payment processing within those borders had been severely cut-off over the past several weeks.”

While it’s impossible to guess the exact reasons behind Merge’s departure from these states, it would be a logical assumption that payment-processing issues were one of the primary reasons. With credit card companies and banks more cognitive to gaming transactions than ever before in NJ and DE, it would make sense that perhaps Merge began experiencing additional processing issues.

As more states continue to regulate online gambling, it will be interesting to see what the short and long term effects on the unregulated markets will be.  It seems unlikely that both regulated and non-regulated poker sites would be able to work harmoniously in the same state.  It also seems unlikely that states would continue allowing non-regulated gambling, as this would obviously take away from tax revenues.