Just two years ago, PokerStars struck a deal with the United States government in order to take control of Full Tilt Poker, in what was the most significant online poker acquisition in the industry’s history. This week, that deal was dwarfed by one that could ultimately allow PokerStars to compete on equal footing in American markets.
The Amaya Gaming Group has agreed to the purchase of the Oldford Group Limited, the parent company of the Rational Group, which in turn controls both PokerStars and Full Tilt Poker. Amaya, a publicly owned Canadian gaming firm, is paying an incredible $4.9 billion for Rational and all of its assets.
This is not Amaya’s first venture into the world of online poker. Back in 2012, the company purchased the Ongame Network from bwin.party. But that was a transaction worth millions rather than billions, and pales in comparison to the purchase the company announced this week.
For Amaya, the purchase of the Rational Group required heavy financing, as only a small portion of the total price will be paid in cash. But the acquisition of PokerStars (and, to a lesser extent, Full Tilt Poker) will generate significant revenues for the company, which should mean that the debt can be paid down relatively quickly without changing the company’s future growth plans.
From the perspective of poker players at the sites being purchased, nothing much should change.
“Rational Group’s executive management team will be retained and online poker services provided by PokerStars and Full Tilt Poker will be unaffected by the transaction, with players continuing to enjoy uninterrupted access to their gaming experience,” the companies announced in a press release.
One major change in leadership is coming, however. Along with other Oldford Group shareholders, Rational Group CEO and founder Mark Scheinberg will divest himself of all shares in the company and resign his positions with Oldford and all subsidiaries.
That could be a major part of Amaya’s plan for the PokerStars brand, which the company hopes can be expanded under their leadership.
“Working with the experienced executive team at Rational Group, Amaya will continue [Scheinberg’s] tradition of excellence and accelerate growth into new markets and verticals,” said Amaya CEO David Baazov.
Chief among those new markets is the United States, where PokerStars has failed to regain a foothold. In New Jersey, regulators chose not to work with the company, while in other states, “bad actor” clauses have left the company with little or no chance of earning a license.
But under new ownership, some of those bad actor provisions may not apply (though in some proposed legislation, even using intellectual property like the PokerStars brand would disqualify the company from a license). And in New Jersey, the removal of Scheinberg and other executives from Rational is exactly what state gambling regulators were asking for when they previously suspended PokerStars’ licensing application.
While Scheinberg will no longer be a part of the PokerStars family, he is fond of what he helped build, and predicted more success for the Rational Group properties under Amaya.
“I am incredibly proud of the business Isai and I have built over the last 14 years, creating the world’s biggest poker company and a leader in the iGaming space,” Scheinberg said. “David Baazov has a strong vision for the future of the Rational Group which will lead the company to new heights.”