On Thursday evening, the Amaya Gaming Group posted a press release on its website confirming that it has “entered into a definitive agreement” to acquire the Rational Group.
As part of its arrangement, Rational’s parent company Oldford Group will cede 100 percent of issued and outstanding shares to Amaya in exchange for a cash sum totaling $4.9 billion.
While several sources speculated that the arrangement would only involve Full Tilt Poker, Amaya will indeed acquire the world’s largest and most successful online poker room in PokerStars, shareholder approval withstanding.
This shocking development comes on the heels of Amaya’s stock rising 29 percent over the past several days and nearly doubling in the past month.
We examine the particulars of the unprecedented deal and its possible impact on Nevada’s regulated gaming market.
Notable aspects of the acquisition
From an operational perspective not much will change. PokerStars and Full Tilt Poker will not experience an interruption of service, nor will there be any unexpected changes to company sponsored poker tours or other live events.
The Rational Group will retain its base of operations in the Isle of Manand the vast majority of its executive management team. Likewise, Amaya’s headquarters will remain situated in Montreal.
Beyond that, the entire poker world might as well have been flipped upside down.
To illustrate, CEO of Rational Mark Scheinberg will leave his post once the transaction is completed, as will OldGroup’s principles. Furthermore, Scheinberg will dispose of all of his shares in the company.
Amaya will effectively become the world’s largest online gaming company. Not only that, for the first time in history, a company associated with the PokerStars brand will be publicly traded on an exchange.
Amaya’s stock price currently resides at $13.03 – an all-time high. It’s likely that investors will be keeping a close eye on it as more news develops.
Key players comment on the Amaya / Rational deal
According to Amaya the acquisition will allow PokerStars faster entry into the U.S. regulated market. To date, PokerStars’ attempts to breach the U.S. have met with heavy resistance in both California and New Jersey.
Amaya CEO David Baazov had kind words for Mark Scheinberg, stating that he “pioneered the online poker industry, building a remarkable business and earning the trust of millions of poker players…”
Considering that PokerStars boasts peak cash-game averages 10 times higher than any other online poker network in the world, truer words have never been spoken.
Scheinberg exhibited confidence in Rational’s new owners, also taking a moment to recount Rational’s many accolades. These achievements were on full display further down in the release.
Of particular note:
- In 2013, PokerStars held an online poker tournament boasting 225,000 participants – a Guinness World Record.
- PokerStars holds a majority share in nearly every poker market it has entered.
- The Rational Group was named one of the best workplaces in the United Kingdom.
- Oldford Group boasted revenues of $976 million and $1.1 billion in 2012 and 2013, respectively.
PPA executive director John Pappas also chimed in with his thoughts:
“Amaya’s acquisition should remove any perceived impediment for this popular brand to once again be available to players in regulated U.S. jurisdictions. This is a positive development for poker enthusiasts and the potential return of the PokerStars brand will grow our game.”
Again, from the vantage point of the U.S. poker player longing for the pre-Black Friday days when PokerStars reigned supreme, truer words have never been spoken.
What does it mean for Nevada?
In the short-term, probably not too much.
Much of the immediate focus will inevitably fall on New Jersey, where PokerStars already has a land-based casino partner (Resorts in Atlantic City).
PokerStars license application was suspended for a two-year period by the Garden State’s regulatory committee. However, with the subtraction of Isai Scheinberg from the equation, it’s presumed that Pokerstars’ case will be reopened.
Attention will also fall to California, where proposed legislation features a “bad actor” clause, which would prohibit PokerStars and FTP from operating in what would likely be the nation’s largest online poker market. Whether Amaya’s acquisition of Rational will soften CA’s stance is currently unknown.
Nevada would benefit from PokerStars’ reentry in more subtle ways. For one, just the mere presence of PokerStars will undoubtedly spread regulated iGaming awareness.
PokerStars will pose an immediate threat to the US’s iGaming operators, who risk extinction once it arrives. That alone should be reason enough for U.S. iGaming operators to up their game, which thus far – the recent efforts of WSOP.com withstanding – has been mediocre.
Looking further, should New Jersey enter an interstate compact with Nevada, it’s conceivable that players from the Silver State would one day gain access to the revered poker network. Imagine the traffic during the World Series of Poker.
Otherwise, I can’t see PokerStars pursuing an arrangement in Nevada that vigorously, if only because the Silver State features a relatively small population compared to New Jersey.