Is PokerStars’ approval a game-changer for NJ?

Is PokerStars’ approval a game-changer for NJ?

Thursday, October 1, 2015 Totally Gaming
Amaya CEO David Baazov led the $4.9bn takeover of PokerStars in 2014

PokerStars is set to offer real-money gaming for the first time in more than four years after being approved to operate in New Jersey.

In what is tipped to be a market-changing development for the US state’s online gaming sector – which has stalled somewhat since it launched in 2013 – Amaya brands PokerStars and Full Tilt could be operational in New Jersey within weeks after being awarded waivers to trade in partnership with Atlantic City’s Resorts Casino Hotel.

The two companies, which have a combined 95 million registered users, first applied for a licence in the state more than two years ago, and were bought by Amaya in a $4.90bn (€4.39bn) deal in 2014.

“We are very pleased to add New Jersey to the long list of regulated markets that have found PokerStars and Full Tilt suitable to offer real-money online gaming,” Amaya chairman and chief executive David Baazov said. “We look forward to bringing our popular brands, innovative technology, marketing prowess and world-class security and game integrity to the growing New Jersey online gaming market.”

New Jersey online gaming revenue totalled $122m in 2014, and for the first eight months of this year it brought in $96.7m, an increase of 15.6 per cent over the same period a year ago.

Just last week, the New Jersey Department of Gaming Enforcement (NJDGE) said that it had again delayed its decision over whether to award a licence to PokerStars because of an ongoing investigation into the brand’s acquisition by Amaya last year.

Following the implementation of the Unlawful Internet Gambling Enforcement Act (2006), PokerStars ceased operating in the US in 2011 and paid a $547m fine to the Department of Justice, despite not admitting wrongdoing. 

In 2013, PokerStars’ then-owner Rational Group applied for a licence in New Jersey, but the state said that the process would be delayed by two years due to ongoing investigations into the company’s operations in the US after 2006.

“Since the acquisition, we have consistently delivered on our stated strategy," Baazov said.“Today’s announcement follows the divesture of our B2B businesses for total gross proceeds of approximately $524.8m, the launch of casino games on PokerStars, which we estimate has one of the largest active user bases of any online casino; the refinancing of our long-term debt and the reduction of our annual interest expense by approximately $62m.

“We are excited about our new product pipeline and enthusiastic that we will experience growth in existing and emerging markets in the future.”
 

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