Amaya acquires PokerStars: What does it mean for the US
We look at three of the key takeaways from the deal, including whether the acquisition opens to the door to PokerStars' return to the US market and what it means for progress in California
Amaya Gaming’s US$4.9bn acquisition of global online poker giant PokerStars has sent shockwaves through the regulated US egaming industry. The deal sees Amaya become the largest publicly listed gaming company in the world, and undoubtedly provides PokerStars with its best chance to date at being regulated and licensed in the US.
But in some ways the deal raises more questions than it provides answers. Is the sale enough to strip PokerStars of its so-called bad actor status or will its tarnished reputation among regulators still remain? Even if licensed to operate in New Jersey and Nevada, would PokerStars have any real impact on market growth? Or would they just kill off what little competition still remains?
Here are three of the key takeaways from the deal.
1) Opens the door
The deal undoubtedly provides PokerStars’ best chance of being awarded an egaming license in the US to date, having failed on four separate occasions to enter the market. In its decision to suspend PokerStars’ application for two years, the New Jersey regulator cited concerns over founder Isai Scheinberg and 13 senior members of the company.
Mario Galea, external consultant to the New Jersey Division of Gaming Enforcement, says the deal “ticks many of the requirements” asked of PokerStars by the DGE, but it “remains to be seen who will remain” within the company. In that sense the Scheinberg’s departures alone may not be enough to wipe the slate clean for PokerStars in New Jersey.
Another potential stumbling block, particularly in other states, is that regulators may view PokerStars the company as a bad-actor, with the Scheinberg’s exit doing nothing to change that. Another question raised by the deal is whether Amaya itself could now be considered a ‘bad actor’, and the impact that could have on its land-based and online licences and businesses.
2) Expect delays in California
One thing is for sure, the deal will certainly reignite the ‘bad actor’ battle taking place between California’s influential tribes, who recently submitted a single streamlined online poker bill. Bad actor language would almost certainly bar PokerStars from entering the fray, who, along with their tribal partner Morongo, have pledged to block the Bill until the language is amended.
With California set to become one of the largest online poker markets in the world if and when it regulates, PokerStars, and indeed Amaya, will want in on the action. And with the deal presenting its best, and possibly only real, chance to re-enter the US market to date, expect Amaya and the PokerStars coalition to throw everything they have at ensuring they are eligible for licensure.
3) What if..?
So what if PokerStars was granted a licence in New Jersey? State Senator Raymond Lesniak has said he believes PokerStars would provide the key to unlocking the full potential of the market, which saw its second month of egaming revenue decline in May. PokerStars would certainly bolster the market, especially given its brand equity and recognition in the US.
But even if they were to double the number of online poker players in the Garden State, based on May’s revenues total poker rake would be around $5m. While the increase would be welcome, it’s far from being a game changer. And what if PokerStars doesn’t grow the market but takes share away from those operators already live and struggling to turn a profit from their online operations?
What’s more, New Jersey regulations stipulate only one online gaming platform per licensee, with the option to operate up to five branded sites or skins. So would Amaya launch the PokerStars platform which is poker-only, or Full Tilt which has an online casino offering too?