California Dreaming

I’ve vaguely followed the less-than-riveting saga happening out in California over the last few months with regard to the state perhaps becoming the fourth in the U.S. to pass some sort of legislation favorable to online poker. I think I’ve been reading such stories off and on for the last decade, at least, reaching back at least as long as the Unlawful Internet Gambling Enforcement Act of 2006 and perhaps even before.

The news this week wasn’t good for those wanting to see California get on board, as the legislative session ended with nothing being passed. A summary of the situation can be read over at PokerNews in “Dreams of a California Online Poker Bill Passing in 2016 Are Dead.”

There are numerous groups involved in this battle, including several tribes (with differing agendas), a few casinos, and, of course, Amaya and PokerStars.

As the PokerNews article explains, there remain differing opinions about the UIGEA as well as the significance of PokerStars continuing to serve U.S. customers following its passage in October 2006.

The sponsor of this latest bill, the Assemblyman Adam Gray, had run into difficulty getting traction without any sort of “bad actor” clause that would ban PokerStars from getting in the game right away. So he added one (a five-year “hard ban”), but that didn’t help get things moving, either. Even if a bill were passed without such a clause, regulators could step in and introduce one later (like happened in Nevada).

Anyhow, it’s all moot for now. They got further down the legislative road this time than in any of these other instances over the last decade-plus. There are genuinely “interested parties” this time, too, when it comes to getting some sort of online poker up and running in the state, although their interests are necessarily aligned.

Feels a long way away, though. And looking at it from afar here on the east coast, makes it feel even further.

Image: “Welcome to California” (adapted), Ken Lund. CC BY-SA 2.0.

PS Gets the OK from NJ

My first thought last night upon hearing the New Jersey Division of Gaming Enforcement had authorized Amaya to begin operating both PokerStars and Full Tilt in the Garden State was “finally.”

That such an announcement would be coming is something we began hearing not that long after New Jersey governor Chris Christie signed the state’s online gambling bill in late February 2013. Since then the likelihood of PokerStars’ return to the U.S. via Jersey has swung back and forth between just-around-the-corner to not-bloody-likely a few times before several hints over the summer punctuated by the phrase “end of the 3Q” made late September seem a real possibility again.

My second thought was that when news finally did arrive it coincidentally did so on the anniversary of the Unlawful Internet Gambling Enforcement Act of 2006 being passed by the House and Senate (as noted in yesterday’s post). Something oddly symmetrical there, I suppose, given how the UIGEA’s history and that of PokerStars (and Full Tilt) have been intertwined over the last nine years.

After that I found myself less specifically thinking in generally positive terms about the news, not necessarily because of what will immediately come of it but rather how longer term the story of “U.S. Online Poker 2.0” will surely be a lot more interesting than it would have been otherwise. Felt like there was very little to look forward to before; now, perhaps, there are at least more possibilities, including more good ones for U.S. players wanting to play online.

That said, it’s been so long since U.S. Online Poker 1.0 -- an era that ended mid-April 2011 -- it is hard to think all that concretely about how last night’s news might conceivably lead to the reintroduction of the game online in more than just a few states here and there.

But it does feel a little like after enduring several orbits of garbage cards while sitting behind a dwindling stack, a hand with some potential has finally arrived. The attention is newly engaged, but the hand still has to be played skillfully. And luck still matters, too, going forward.

Forward-Looking With Amaya

I took close to an hour out of the day today to listen to that Amaya conference call in which the new owners of PokerStars and Full Tilt (since August of last year) discussed earnings from last year’s fourth quarter. Or rather I should say I listened to the sucker while performing various farm chores, as an .mp3 of the call has been uploaded here.

Chris Grove of Online Poker Report has also spent some time listening to the call, and in fact has transcribed the whole thing here, if you’re curious.

Among the headlines coming out of the call were CEO David Baazov’s statements -- “forward-looking” and thus subject to the usual disclaimers about such, natch -- regarding the future growth of poker (“we are still a poker-first business” he reiterates), as well as about other areas of interest for Amaya in the coming months and years.

“Our goal is to double the poker sector in the next five years,” stated Baazov, adding that the “three primary ways” Amaya aims to achieve that goal will be “entering new markets where we currently have little or no penetration in real-money poker,” “creating consumer demand and excitement through innovative marketing and promotions,” and “continuing to innovate the product to attract more players and reactivate lapsed players.”

Immediate response to the idea of doubling the poker sector within five years varied from expressions of doubt to outright cynicism, although if you think about it in the context of online poker five years is a lifetime.

Baazov spoke further of particular areas of the world Amaya desires entering, including those states in the U.S. with current online gaming legislation and those considering it (in which Amaya is actively lobbying). He talked as well about the other “verticals” including casino games and sports betting, the latter having only modestly launched in a beta version this week.

The other big headline coming out of his comments had to do with the declaration of an intention to enter daily fantasy sports, an area currently dominated by FanDuel and DraftKings. That latter intention obviously raises eyebrows here in the U.S. where the majority of us aren’t currently included in discussions of online poker or online casino games (and likely won’t be for some time).

CFO Daniel Sebag came on after that to talk specifics regarding the 4Q bottom line and what’s anticipated going forward, then Baazov hopped back on to talk briefly about the current investigation by the Autorité des Marchés financiers (AMF) regarding some trading occurring around the time Amaya acquired the Rational Group as well as the company’s application to be listed on NASDAQ Global Select Market. He also alluded to Amaya’s sale of the gaming machine supplier Cadillac Jack, announced earlier in the week.

The Q&A that followed touched on further specifics, mostly reiterating points made during the statements. There elaboration was made regarding Amaya and daily fantasy sports, with Baazov responding to a question by saying “the goal is to be up before the NFL season starts.” He also mentioned specifically the U.S. folks who were “formerly PokerStars players” and how Amaya is banking on “a clear, strong crossover with poker.”

It is always curious to eavesdrop on these sorts of discussions. And to look back on them at some future date as indicators of what a company was thinking at a current moment in time. You know, when backward-looking rather than forward-looking.

The Reunited States: Amaya To Bring PokerStars Back?

Found it a little uncanny that on the very day I finally got my Full Tilt Poker money back -- three years and almost two months after Black Friday came along and the games ended both there and at PokerStars for United States players -- news broke that PokerStars (and the new FTP) may actually be coming back to the U.S. sooner than later.

You’ve no doubt heard about this mammoth deal struck between the Canadian-based Amaya Gaming Group and the Oldford Group Limited, parent company of the Rational Group which in turn owns PokerStars and Full Tilt 2.0. After six months’ worth of negotiations between the two entities, Amaya will be purchasing the online sites, the live poker tours and events, and other associated assets belonging to Rational for a hefty $4.9 billion. Seems hefty, anyway, although some are noting the price tag could have been a lot higher.

A few final steps have to be taken before the deal is finalized (e.g., Amaya shareholders have to okay it, some other approvals have to come), but it sounds like everything is in place for all that to happen.

Amaya already has one online poker platform -- Ongame -- and thus will soon have three. And most notably Amaya is also already licensed to as a service provider for online casinos in New Jersey. Amaya is a “B2B” provider while Rational is a “B2C”; thus, as Amaya says in its presser, “the Transaction combines complementary businesses with minimal overlap.”

The Rational Group had to this point failed to get licensed in the state thanks to its relationship with Isai Scheinberg and his being named in the Black Friday indictment and civil complaint. I believe it was late last year that New Jersey said they’d be waiting another two years before considering Rational’s application again. The change up top thus helps Amaya potentially introduce the Stars platform into NJ much sooner.

Chris Grove over at the Online Poker Report does well to explain both the deal and some of the other possible implications, including what it might mean with regard to PokerStars finding its way into other states (including those yet to pass online gambling legislation). Grove even speculates about the potential for Caesars and Stars somehow to get together down the road with Amaya now in charge.

Among the “Key Transaction Highlights” also listed in the Amaya presser, it is mentioned that “Rational Group’s executive management team will be retained and online poker services provided by PokerStars and Full Tilt Poker will be unaffected by the Transaction, with players continuing to enjoy uninterrupted access to their gaming experience.”

While Stars, FTP, the tours, and everything else will be left to the Rational Group guys to continue to manage, it sounds like Amaya has visions of adding what it already has to help “expand the nascent Full Tilt Poker casino platform” while also planning to “support Rational Group’s growth initiatives in new gaming verticals, including casino, sportsbook and social gaming, and new geographies.”

Everything remains “wait and see,” especially until the deal is finalized once and for all, but prospects shift immediately, particularly here in the U.S., when it comes to online poker.

And here we are on Friday the 13th, too, which also recalls another landmark day in the twisty history of online poker in the U.S. Uncanny.