Amaya Controls 2/3 Global Online Poker Market, PokerStars NJ to launch mid-2016

In a recent third quarter 2015 report, Canadian-based Amaya Inc. announced that the company now controls more than 70% of the global online poker market. As exciting as that news should be for shareholders, it was shadowed by a delay that saw stock prices plunge nearly 40% after Amaya revealed PokerStars and Full Tilt will not launch in New Jersey until mid-2016, rather than ‘by end of 2015’ as previously anticipated.

It’s no secret that the company’s top asset, PokerStars, is the world’s largest and most popular online poker operator. The brand has held such notoriety for nearly a decade, even after being legally and forcibly removed from the US market in 2011.

The Q3 2015 earnings call confirmed that PokerStars alone controls a whopping 68% of the global online poker market.

Amaya’s other online poker giant, Full Tilt, controls only 3% of the market, but is still ranked among the top 10 traffic generating poker sites on the internet. Combined, their prevalent status has harvested 71% control of the worldwide market, up from a combined 68% in Q3 2014.

The earnings report showed 3% growth in new depositors to its real money platforms, and a 40% increase in tournament activity compared to Q3 2014. Amaya attributed the excessive rise in online poker tournament activity to its “introduction of PokerStars’ Spin & Go’s tournament variant in H2 2014”. The company said its addition of online casino games was the major factor in the increase of unique player registrations.

So Much Growth, Yet Shares Plummeting

Amaya Shres Plummet after Q3 2015 Earning CallFor the last 30 days, Amaya shares (NASDAQ: AYA) have held steady between $21-$24. On Monday, the day before the earnings call, shares were sailing along at 23.56. But with Tuesday morning’s earning call came a sudden fallout as shares were down 32.5% to 15.90 by 10:00am. Two days later, they had plunged further to 14.44, down 39% since Tuesday, and have since recovered slightly to 16.50 when the market opened today.

All this, despite revenue having grown “approximately 19%” overall – What gives?

PokerStars blamed a series of “extraordinary events”. Among the list were the “temporary suspension of real money operations in Portugal” (July, 2015), the “impairment of real money operations in Greece”, and the “suspension of operations in approximately 30 other jurisdictions following Amaya’s acquisition of Rational Group in 2014”.

But investors knew about these problems for months. There has to be more to it, and one particular impediment is the most likely suspect.

PokerStars, Full Tilt NJ Launch moved to H1 2016

When New Jersey finally granted Amaya a license to launch PokerStars and Full Tilt in the Garden State in September 2015, it was the online poker story of the decade. Having spent two years fighting for the right to enter the state’s online poker market, and being a driving force behind Amaya’s acquisition of the company in 2014, CEO David Baazov assured everyone Amaya would be prepared for the NJ launch by end of 2015.

In the Q3 report, however, it was stated that “Amaya anticipates initially launching [PokerStars] in New Jersey in the first half of 2016 through its agreement with Resorts Casino Hotel in Atlantic City, New Jersey.”

While that statement was considered a “subsequent… highlight” in Amaya’s report, it could be seen as a major setback by the rest of the corporate world and online poker community.

 

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