The Amaya Gaming Group confirmed on Thursday evening, through a press release on its website, that it has “entered into a definitive agreement” to purchase the Rational Group.
Under the agreement, Oldford Group, the parent company of Rational, will surrender 100 percent of its issued and outstanding shares to Amaya in return for a cash payment of $4.9 billion.
Despite speculation from various sources that the deal would only include Full Tilt Poker, it has been confirmed that Amaya will acquire PokerStars, the world’s largest and most successful online poker room, provided the shareholders approve.
This surprising turn of events follows Amaya’s stock increasing by 29 percent in the last few days and almost doubling in the past month.
We explore the details of the unparalleled agreement and its potential effects on Nevada’s regulated gambling market.
Notable aspects of the acquisition
From a functional point of view, there will be minimal changes. Neither PokerStars nor Full Tilt Poker will face service disruptions, and no sudden alterations will occur to company-sponsored poker tours or other live events.
The Rational Group will maintain its operational base in the Isle of Man and keep most of its executive management team. Similarly, Amaya will continue to have its headquarters in Montreal.
Additionally, it could be said that the whole poker world might as well have been turned upside down.
For instance, once the transaction is finalized, Rational’s CEO Mark Scheinberg and the principals of OldGroup will step down from their respective positions. In addition, Scheinberg will sell off all his company shares.
Amaya is set to become the largest online gaming company worldwide. Additionally, a company linked with the PokerStars brand will, for the first time ever, be publicly traded on an exchange.
Currently, Amaya’s stock price stands at an all-time high of $13.03. As more news unfolds, it is expected that investors will be monitoring it closely.
Key players comment on the Amaya / Rational deal
Amaya asserts that the acquisition will facilitate a quicker entry for PokerStars into the regulated U.S. market. So far, PokerStars has faced significant opposition in its efforts to penetrate the U.S. market, particularly in California and New Jersey.
David Baazov, CEO of Amaya, lauded Mark Scheinberg, saying he “pioneered the online poker industry, built an amazing business, and gained the trust of millions of poker players…”
Given that PokerStars has peak cash-game averages that are tenfold higher than any other global online poker network, it’s safe to say that no truer words have been spoken.
Scheinberg displayed faith in Rational’s new proprietors, briefly highlighting the company’s numerous accolades. These accomplishments were prominently showcased later in the release.
Of particular note:
- In 2013, PokerStars set a Guinness World Record by hosting an online poker tournament with 225,000 participants.
- In almost every poker market it has ventured into, PokerStars commands a majority share.
- The Rational Group was recognized as one of the top workplaces in the United Kingdom.
- In 2012 and 2013, Oldford Group reported revenues of $976 million and $1.1 billion respectively.
John Pappas, the executive director of PPA, also shared his thoughts:
The acquisition of Amaya should eliminate any perceived obstacles, making this popular brand available once again to players in regulated U.S. jurisdictions. This is a positive turn of events for poker enthusiasts, and the potential comeback of the PokerStars brand will enhance our game.
From the perspective of a U.S. poker player yearning for the days before Black Friday when PokerStars was dominant, no words have ever been more accurate.
What does it mean for Nevada?
Probably not too much in the short-term.
The immediate focus will largely be on New Jersey, where PokerStars already has a partnership with a land-based casino, Resorts in Atlantic City.
The Garden State’s regulatory committee suspended PokerStars’ license application for a two-year period. However, with Isai Scheinberg no longer involved, it is expected that PokerStars’ case will be reconsidered.
Focus will also shift to California, where potential laws include a “bad actor” clause. This would prevent PokerStars and FTP from operating in what could likely be the country’s biggest online poker market. It is still uncertain if Amaya’s purchase of Rational will influence California’s position.
The reentry of PokerStars into Nevada would have more nuanced advantages. For instance, the simple presence of PokerStars would unquestionably heighten awareness of regulated iGaming.
PokerStars’ arrival could pose a significant challenge to US iGaming operators, potentially threatening their survival. This should be a wake-up call for these operators to improve their performance, which, apart from recent efforts by WSOP.com, has been lackluster so far.
If New Jersey decides to join an interstate compact with Nevada in the future, it could potentially result in players from Nevada gaining access to the prestigious poker network. Just envision the influx of traffic during the World Series of Poker.
Otherwise, I doubt PokerStars would aggressively pursue a deal in Nevada, mainly because its population is relatively small compared to New Jersey.
