Amaya Inc., a Canadian firm, is one of the largest gaming companies in the world. Headquartered in Montreal and with offices in many countries, the company is traded on the Toronto Stock Exchange. Already an immensely large company in 2014, Amaya’s $4.9 billion purchase of the parent company of Full Tilt Poker and PokerStars from Isai and Mark Scheinberg made it the largest publicly listed gambling business in the world.
Amaya operates a diverse portfolio of products and services for the gambling industry. Its products include lotteries, and platforms for poker, casino, and sportsbook, in addition to gaming software for slot machines. Some of the most popular online casinos use Amaya products and services.
The company received a lot of bad press last year on account of securities fraud charges laid on its CEO David Baazov.However, Baazov retired later that year. He attempted to buy over the company he had founded, but his efforts were unsuccessful. Amaya announced earlier in 2017 that it would be changing its name to The Stars Group and that the new entity would be headquartered in Toronto.
Long-term investors are likely to consider Amaya as a good option because it has a strong business model and multiple competitive advantages. This company has high liquidity given that its gambling businesses operate almost entirely on cash. As a matter of fact, it currently pulls in $335 million in cash alone.
Amaya’s casino and sports gambling businesses have been growing at a steady pace and the company is in line to dominate the industry globally. It also stands to benefit very much from the increasing popularity of its poker products in the United States. Online gambling is banned in most parts of the United States, but there is an immense demand for it as can be seen by the large numbers of Americans playing at black market sites. There are indications that some states in the US are planning to legalize online gambling to various extents. Amaya, with its current market share and international presence, is well positioned to enter this market and capture the immense demand for it.
Amaya provides an interesting scenario with regards to how it has expanded its business and what plans it has for the future. American companies, often under the pressure of their shareholders, trying to expand to other markets once they have exhausted the potential of their domestic markets. However, Amaya is already a major force to reckon with in the industry, dominating markets such as the United Kingdom, France, Spain, and Italy. Any investor in the company will benefit tremendously in case Amaya is able to launch its operations in the United States. In fact, there might be a 10-year time-frame for this to happen because it seems likely that the US will amend its federal laws that ban online gambling.
Amaya’s revenues have grown steadily over the past five years, climbing from an impressive $77 million in 2012 to a whopping $1.2 billion in 2016. Amaya has recently invested money to expand its online sportsbook and casino, and this has brought it impressive returns. The company will also find it easy to retain its market share because it is unlikely to have many competitors on a global scale given the high cost of entering the business. Amaya will benefit from already owning a number of licenses and the infrastructure to do business. The company will also be able to keep profitability at a high level since most of its costs are fixed. Overall, this is a promising prospect for long term investment, and is, therefore, attracting a lot of interest.