Amaya Gaming Buys PokerStars Parent Company for $4.9 Billion

On June 12, Amaya Gaming purchased the Rational Group, the parent company of PokerStars and Full Tilt Poker, for $4.9 billion.
 
The $4.9 billion price tag is not only a record amount for any gaming acquisition, but it also propels Amaya into being the world's biggest publicly traded online gaming company overnight.

If you are curious how a smaller company like Amaya could purchase a bigger company like Rational, it was mostly accomplished by the issuing of new debt.  Out of the $4.9 billion, $2.1 billion will come from secured credit facilities, $800 million from in senior secured second lien term loans, $1 billion from the issuance of convertible preferred shares, $460 million from the issuance of subscription receipts, and $540 million in cash.
 
It is speculated by industry insiders that one of the main reasons for this transaction was to allow PokerStars and Full Tilt Poker a stronger possibility of entering US regulated markets in the near future.  While states that already have regulated gaming like New Jersey, Delaware, and Nevada are relatively small, the action is heating up in California where there are hopes this helps PokerStars and Full Tilt Poker avoid any "bad actor" clauses.
 
It is believed that "bad actor" clauses may still be a problem for both sites since they were operating in the US after 2006.  In other words, it may not matter that both sites now have new ownership and instead may come down to a state-by-state battle or legal action.  Let's not forget that groups which planned to have a stronghold in the US regulated markets will do their best to fight PokerStars and Full Tilt Poker from entering the US marketplace.
 
It should be interesting to see how Amaya handles having three different poker platforms and what this might mean for poker players.  It is expected that this transaction should help Full Tilt Poker further develop its casino platform introduced earlier this year and help one or both sites develop sports betting and social gaming.
 
The good news for poker players, especially ones who aren't quick to embrace change, is that we should have plenty of time to digest this transaction.  We shouldn't expect big changes on PokerStars or Full Tilt Poker overnight, as it takes time to integrate such a huge transaction and it is also expected that the management currently running the day-to-day operations at PokerStars and Full Tilt Poker will remain the same.  The exception here includes any owners of the Rational Group, such as CEO Mark Scheinberg, who at the time of the sale owned 75% of the company.
 
Amaya CEO David Baazlov commented, "This is a transformative acquisition for Amaya, strengthening our core B2B operations with a consumer online powerhouse that creates a scalable global platform for growth."

He added, "Mark Scheinberg pioneered the online poker industry, building a remarkable business and earning the trust of millions of poker players by delivering the industry's best game experiences, customer service, and online security. Working with the experienced executive team at Rational Group, Amaya will continue that tradition of excellence and accelerate growth into new markets and verticals."
 
The Amaya Board of Directors will also not be changing.

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