In this edition of Inside Gaming, the multibillion-dollar purchase of PokerStars by Amaya Gaming rocks the industry, New Jersey’s online gaming numbers are down, and MGM gets good news about its efforts to launch casino gaming in Massachusetts.
A Landscape-Changer: Amaya Purchases PokerStars
Eclipsing the week’s gaming news late last night was word that the Amaya Gaming Group Inc. and Oldford Group Limited — the parent company of the Rational Group that owns both PokerStars and Full Tilt Poker — had agreed to a deal for Amaya to purchase all shares of Oldford for the whopping sum of $4.9 billion.
According to Amaya, the deal is expected to be “completed on or about September 30, 2014” following the approval of Amaya’s shareholders and receipt of certain regulatory approvals, all expected to occur by the target date.
A press release issued late last night by PokerStars indicated the most notable possible consequence of the deal, namely the reintroduction of PokerStars to the U.S. market. “Amaya believes the transaction will expedite the entry of PokerStars and Full Tilt Poker into regulated markets in which Amaya already holds a footprint, particularly the U.S.” the release states.
With the purchase Amaya will obtain the two online poker platforms, PokerStars and Full Tilt Poker, adding to their already-owned Ongame platform. As Amaya is already a licensed provider in New Jersey, speculation points to that state as a likely initial point of entry for PokerStars back into the U.S.
Once the deal is completed Amaya will also own the many live tournament poker series and events under the PokerStars aegis, including the European Poker Tour, the Latin American Poker Tour, the Asia Pacific Poker Tour, as well as PokerStars-branded poker rooms and other associated assets.
For more on the deal’s details and its possible implications, see Jonathan Zaun’s report as well as Giovanni Angioni’s report on this morning’s conference call “Amaya CEO on Acquisition of PokerStars: ‘It Will Transform the Entire Gaming Industry.’”
Six Months On, Gaming Growth Stalls in Jersey
Last night’s news of Amaya’s purchase of PokerStars comes just as the Division of Gaming Enforcement of New Jersey released figures indicating that the growth of online gaming in the state has stalled since going live in November.
Just six months after the state first went online with internet gambling, the numbers are in decline as May’s total revenue from online operations slipped $1 million from April, totaling $10.4 million for the month. The report also indicated that overall casino revenue — including brick-and-mortar casinos though not the now-closed Atlantic Club — was up slightly even with the decline from the online sector.
As reported by the Associated Press, the $61.9 million casinos have earned via online gaming is “a far cry from the pace some state political leaders expected,” with reference being made to Governor Chris Christie’s estimation that casinos would gain as much as $1 billion from online revenue during the first year of operation.
The Borgata continues to be the top earner in the state when it comes to online gaming revenue, although it, too, was down in May, as was its nearest current competitor, Caesars Interactive. The Tropicana and Trump Plaza were also down in May from the previous month while the Golden Nugget enjoyed only a slight increase.
Meanwhile more are opening online gaming accounts in New Jersey, with 9% more accounts having been created during May than had been opened in April.
When assessing the overall figures for the month, Matt Levinson who chairs the New Jersey Casino Control Commission noted how in brick-and-mortar casinos players are in fact playing more, yet “Lady Luck... favored the players a lot more and the casinos won a lot less at the tables.”
Read more about the current numbers in New Jersey at NJ.com in “Online gambling hits wall in NJ 6 months after launch.”
First Massachusetts Casino License Goes to MGM
In other news from the northeast U.S., late this week came reports that MGM Resorts International would become the first casino operator in Massachusetts following a review by the Massachusetts Gaming Commission (MGC). Also of note is the decision by the MGC to issue the license to MGM while delaying payment of the $85 million state licensing fee until 30 days after the license is finalized.
The delay was agreed to because of uncertainty regarding the possibility that the state’s law allowing casino gaming might possibly be repealed via a voter referendum in the fall. The state’s Supreme Judicial Court is currently in the process of deciding whether such a referendum can be added to the November ballot.
In late 2011 Massachusetts passed legislation to introduce casino gaming in the state, giving authority to the MGC to license three casinos, one for each of three geographical regions in the state, plus one slots-only casino. By August 2012 the MGC announced it would not consider applications from the southeastern region of the state as the Mashpee Wampanoag tribe had plans to develop its own tribal casino in that part of the state.
It was later in 2012 that the Commission began accepting applications for licenses, then starting in late 2013 began the process of reviewing those applications. At last this week came an agreement in principle to issue MGM the state’s first casino license after a thorough review of the MGM’s $800 million Springfield project.
The project proposal includes a hotel and casino as well as an extensive shopping and entertainment complex, a cinema and bowling alley, and a public plaza. Expectations are for MGM Springfield to provide a challenge to the Foxwoods and Mohegan Sun casinos in neighboring states.
“We want to get to work and to get this project going,” said MGM Springfield President Michael Mathis.
Read more about the MGC’s decision and the MGM’s plans in Massachusetts at Boston.com.