Just three months ago, almost no one would have predicted that the relatively unknown gaming systems supplier Amayawas in advanced talks to purchase the parent company of the online poker behemoth PokerStars. Yet on Friday, the Canadian firm announced the completion of its acquisition of PokerStars and Full Tilt, instantly transforming it into the biggest publicly traded online gambling company on the globe.
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“We are extremely pleased to have completed this acquisition,” said Amaya CEO David Baazov in a press release. “Through PokerStars, Full Tilt, and its multiple live poker tours and events, [Rational Group]brands comprise the world’s largest poker business, generating diversified and recurring revenues across the globe from its extremely loyal customer base.” Amaya’s shareholders voted in favor of the deal earlier this week.
The purchase was completed in an all-cash $4.9 billion transaction and includes the PokerStars and Full Tilt brands along with the popular European, Latin American, and Asian Pacific Poker Tour events. The company’s poker sites are two of the largest in the world and have dealt over 100 billion poker hands and run over 800 million tournaments, according to the release.
“Since launching PokerStars in 2001, we have grown the business each year thanks to constant innovation, unparalleled customer service, and the talent of our dedicated workforce,” said PokerStars CEO Mark Scheinberg. “I’m confident that Amaya, together with Rational Group’s leadership, will continue to successfully grow the business into the future.”
The transfer of ownership out of the hands of Mark and his father, Isai Scheinberg (pictured), is considered by many analysts to be the motivating factor behind the sale. On Black Friday, the elder Scheinberg was charged by the US Department of Justice with a bevy of offenses including violating the UIGEA, operating an illegal gambling business, and money laundering.
The father and son’s continual involvement in the company has already led to issues with PokerStars reentering the potentially lucrative regulated US gambling market. The sale to Amaya could potentially solve both of these problems. For one, the new company leadership would be untainted by Black Friday and, furthermore, the cash raised from the deal could be used for a settlement between Isai and the DOJ.
That amount would likely be massive. In 2008, former PartyPoker CEO Anurag Dikshit handed over $300 million to the agency and sold his stake in Party Gaming, while Mark Scheinberg settled for $50 million last year.
Insiders have said that one of Mark Scheinberg’s final goals for the company was to see PokerStars reenter the US market. So far, though, the site has been blocked at every turn, first after an ill-fated agreement to buy the Atlantic Cluband later when New Jersey regulators suspended their review for two years.
But with the transfer to Amaya, that vision might finally be turning into a reality. With the sale complete, many believe it’s only a matter of time before New Jersey regulators give PokerStars the green light to open up shop in the state.
In California, the company is making inroads as well, but is engaged in a fierce battle against a coalition of tribes who would rather not face the competition that a brand like PokerStars will surely bring. In April, the Rational Group announced a partnership with the Morongo Band of Mission Indians and three large card clubs in its effort to begin operating in the populous state.
As part of its lobbying strategy, PokerStars has continually highlights the fact that it holds more online poker licenses than any other i-gaming company on the planet. And according to the release, “works closely with regulators around the world to help establish sensible global regulation.”
Stay tuned to PocketFives for the latest on the PokerStars sale.