Former CEO David Baazov Resigns from All Positions at Amaya Gaming
David Baazov resigned “from all positions” at Amaya Inc., while dealing with charges of insider trading. Baazov took a voluntary leave of absence as the chairman of the board and CEO when the charges were unsealed back in March 2016, but had remained as Amaya’s president and a member of the board. Rafi Ashkenazi was appointed as the Interim CEO back in March, but is now set to become the chief executive “on a permanent basis“.
David Baazov is charged with insider trading due to the use of privileged information when trading shares of Amaya between December 2013 and June 2014. It was in June of 2014 that Amaya announced its plan to acquire the world’s largest online poker site, PokerStars, for $4.9 billion. At the time, Amaya was a successful, yet fairly unknown, online software developer. PokerStars had been one of the chief brands associated with the online gambling boom over the previous 10 years.
David Baazov Statement
Upon leaving the company, David Baazov released a statement which said, “I am proud of my contributions in building Amaya into the successful company it is today, and continue to be supportive of its strategy and management.”
The announcement comes at a time that PokerStars was announcing its 2nd Quarter earnings. Amaya’s online poker revenue for Q2 was $215.6 million, which represents a flat year-to-year picture. Total company revenue was up 10.2%, to $285.9 million.
PokerStars Quarterly and Yearly Numbers
The online casino and sportsbook revenue made up 21% of the company’s overall revenue, which is a 12% increase over the company’s 2015 numbers. PokerStars entered the New Jersey online gambling market, in a partnership with Resorts Casino out of Atlantic City. The Resorts/PokerStars brand has an online poker room and casinos which operates legally in the New Jersey gaming market. It had 44% of the online poker market in New Jersey in 2016 Q2, despite having been in the market a matter of months.
Poker revenue was down as a percentage of company revenues from 90% in 2015 to 75% in 2016. The Q1 revenues saw a stark drop in poker revenues, down 11% from $242.8 million to $216.4 million year-to-year.
70% of the Global Poker Market
Despite certain troubling signs, Amaya Incorporated continues to control about 70% of the global real-money online poker market. Whatever troubles the parent company has, players still continue to prefer the PokerStars platform, guaranteed tournament prizes, and selection to all other brands.
Attempts to Enter California iPoker
PokerStars continues to be involved in a lobbying effort to gain access to the California online poker market, though that effort remains deadlocked at the present time. PokerStars has a deal in place with the Morongo Band of Indians, as well as a couple of private Los Angeles poker rooms. Most of California’s gaming tribes are opposed to PokerStars’ inclusion, led by the Agua Caliente and Pechanga bands.
That opposition is based on ‘bad actor’ claims, stemming from PokerStars remaining in the US gaming market after the American government deemed online poker illegal, under provisions of the UIGEA and Wire Act. From 2006 to 2011, PokerStars remained active, while many other sites left the US market. On April 15, 2011, PokerStars, Full Tilt Poker, and other top card sites had their domains seized by the U.S. government — a date which is termed Black Friday in the gambling industry.
Eventually in 2012, PokerStars settled its dispute with the U.S. government without admitting any wrongdoing, despite paying over $700 million to end the dispute. David Baazov had no connection to PokerStars during those times, but instead bought the company from the executives who did, as they remained indicted by the U.S. government and would have trouble re-entering the U.S. gaming market. Thus, the bad actor claims have little to do with David Baazov.
Baazov’s Troubles Used against PokerStars
In April 2016, the California tribes opposed to PokerStars’ entry into the California poker market mentioned David Baazov’s current legal troubles during hearing on the bad actor clauses. Concerns about licensing in big US states like California and Pennsylvania — either of which might legalize online poker in the near future — might have to do with Baazov’s decision to leave the company. His legal troubles make it difficult for the company to move forward in many areas, though.
The insider trading charges do not involve only David Baazov. He was one of 13 gaming executives who were indicted on those charges by a regulator of the Toronto Stock Exchange. David Baazov’s brother was another of those indicted. Speculation in the industry suggested Baazov’s brother was a ringleader in the insider trading, though all parties have pleaded not guilty to the charges.