Posts Tagged ‘grey online poker market’

3 Implications of Baazov’s Insider Trading Charges

Thursday, March 24th, 2016

david-baazov-pokerstarsThe poker news of the week is definitely the insider-trading charges against David Baazov. The CEO of Amaya Gaming (PokerStars’ parent company) is facing five counts of manipulating stock prices from 2013 to 2014, when Amaya bought Stars for $4.9 billion. Luckily, PokerStars is not accused of any wrongdoing, however, there could still be some implications for Stars as a result. That said, here are three possibilities to consider as the insider-trading scandal moves forward.

1. PokerStars’ Expansion into US will be Tougher

When Amaya purchased Stars in a record-Canadian transaction, it was thought that this could be the turning point for a company that built its fortune on grey online poker markets. Furthermore, Amaya would have a much better chance of getting PokerStars regulated in US states than the Scheinberg family. Everything was going according to plan when Stars launched in New Jersey earlier this week. But Baazov’s insider-trading charges put another black eye on PokerStars’ history and will prolong their efforts to enter California and other future markets.

2. Amaya Stock won’t be rising any time soon

After news that their CEO had been charged with insider trading, Amaya Gaming’s stock plummeted 26%, stopping at under $15 a share. This is a far cry from its early 2015 peak of $37, which would tumble amid news that a strong American dollar was hurting PokerStars customers’ purchasing power. Baazov’s insider-trading charges represent the latest incident to hurt the company’s stock prices.

3. Baazov won’t be taking the Company Private

Several weeks ago, Baazov offered a proposal to take Amaya private. His $3.3 billion offer is quite a bit less than the original $4.9 billion purchase price. And, now that he’s facing serious charges, it doesn’t look like the board will have much to mull over. Amaya will remain a public company for the time being while PokerStars’ top brass attempts to work out of this jam.