Just a few months ago, David Baazov took a voluntary leave of absence over insider trading allegations made by Quebec's securities regulator Autorite des Marches Financiers. With Baazov stepping back from Amaya (The parent company of PokerStars), two men have been appointed to fill that role. Divyesh Gadia is serving as interim Chairman, and Rafi Ashkenazi as interim CEO, with Ashkenazi recently declaring that “the company remains focused on growth patterns despite management changes.”
David Baazov will not seek re-election
Earlier last week, Amaya published their latest financial report. This latest report confirms that David Baazov will not stand for re-election, and the same can be said for Chief Financial Officer Daniel Sebag. The report also added that Amaya are currently searching for suitable candidates to fill the Directors roles. Ashkenazi made the following statement during the financial report: “During the first quarter, we continued to execute on our growth plans despite unexpected challenges, including management changes and the ongoing strategic alternatives process. We attracted new customers to PokerStars, continued to introduce changes to improve the overall poker experience, expanded our online casino offering and continued to invest in our emerging online sportsbook."
More revenue – less poker
Compared to the the first quarter of 2015 overall revenue for Amaya has increased by 6% from $272.3 million to $288.7 million in the latest report. Changes in foreign exchange rates have had a negative impact however, with revenue increases projected at 13.9% if not for that factor. That revenue is of course heavily weighted towards the poker side of Amaya's operations, but having branched out into casino and sportsbook offerings, there has been an increase in revenue from those sectors. The split in the first quarter of 2015 was 89% poker revenue and 6% from casino and sports betting, but in the first quarter of 2016, the split has shifted to 75% and 21%.
This means that the 6% overall increase represents a decline in poker revenue and an increase in revenue from other areas. For poker players this trend should be a concern. The Casino and Sports betting offerings are clearly cannibalising the poker side of operations, even if it has only taken a few small bites so far. Amaya's core poker revenue fell 11% year on year which makes for worrying reading.
Funds that would be brought to the poker tables and traded back and forth between players are instead being thrown into the black hole of casino games and sports betting – games where only the house wins.