Inside Gaming: Amaya Jumps in DFS with Victiv Acquisition, to Rebrand as StarsDraft
This week��s Inside Gaming shares yesterday��s news regarding Amaya��s acquisition of Victiv and its plans to become a bigger player in the daily fantasy sports market, an update on how Harrah��s New Orleans is handling a city-wide smoking ban in public establishments, and a report on IGT��s first earnings report after having acquired GTECH.
Amaya Acquires Daily Fantasy Sports Site Victiv; StarsDraft Coming Soon
Yesterday��s big industry news was the announcement that Amaya Inc., the Canadian online gaming company that just over a year ago acquired PokerStars and Full Tilt, has now acquired the daily fantasy sports site Victiv. The site will be rebranded as StarsDraft with initial plans to launch in U.S. markets and then later through the PokerStars platform, and the current Victiv team will continue to manage the business going forward.
Based in Austin, Texas, Victiv has been part of the burgeoning daily fantasy sports scene for just under a year, and currently exists as part of the growing chase pack of sites behind industry leaders DraftKings and FanDuel. Victiv currently is available in 45 of 50 U.S. states, excluding the five (Arizona, Iowa, Louisiana, Montana, and Washington) in which daily fantasy sports is not considered legal.
According to Amaya��s announcement, Victiv has distinguished itself already, however, thanks to ��its user-friendly and innovative software.�� In a conference call discussing 2Q results, Amaya CEO David Baazov underscored the functionality of Victiv��s site as having helped encourge the acquisition, noting that Amaya made the choice after having considered the technology offered by 12 different DFS companies.
Expectations were tempered somewhat, however, regarding the size of splash the new StarsDraft site will initially make in DFS, as well as the extent to which Amaya will be pushing the new site. ��The market still has to mature more for it to appreciate to a size where we would be willing to make any significant investement,�� said Baazov, as Toronto��s The Globe and Mail reports.
In the accompanying press release, Victiv CEO Matthew Primeaux was enthusiastic about new arrangement. ��StarsDraft will combine Victiv's innovative platform and experienced DFS team with Amaya��s expansive consumer base and operational excellence as the world��s preeminent online gaming brand,�� said Primeaux.
��We intend to capitalize on what we believe is strong crossover between online poker players and daily fantasy sports,�� Primeaux added. ��PokerStars is the most-trusted brand in online gaming and brings unmatched security, customer support and technical infrastructure that we believe all players can rely on.��
The release also highlights the site��s ��Bankroll Builder�� free-to-enter contests as a ready means to attract new DFS players by giving opportunties to win money without depositing.
The timing comes just weeks away from the start of a new NFL season, something Kevin Wright of Canaccord Genuity (a Canadian investment and banking company) referenced in a report shared by The Globe and Mail.
��The daily fantasy sports space in North America has significant potential and we view the PokerStars marketing and operational experience as an investment positive as it builds a presence,�� wrote Wright, who estimated the potential market for DFS to grow to $1.2 billion by 2020.
During the earnings call Baazov additionally confirmed that Amaya had withdrawn from entering into a partnership with GVC Holdings PLC in order to purchase bwin.party Digital Entertainment PLC, as we reported in late July.
Visit The Globe and Mail for more on Amaya��s acquisition of Victiv and the potential impact of StarsDraft on the DFS market.
New Smoking Ban Cuts Into Harrah��s New Orleans Revenue
Back in March we reported on how the New Orleans City Council had unanimously voted in favor of banning smoking in most of the city��s public establishments �� including casinos �� with the ban scheduled to go into effect in late April.
Caesars�� Harrah��s New Orleans responded to the vote with a request to be allowed a separate smoking section, insisting that the ban would significantly affect business and thus hurt the city as it would collect less tax revenue. No exceptions were granted, however, and in the almost four months since the ban there has indeed been a 16% decline in gaming revenue at the casino, as the Las Vegas Review-Journal reports.
There to cover the 10th anniversary of Hurricane Katrina, Howard Stutz of the LVRJ reports that according to Harrah��s New Orleans General Manager Dan Real (also the southern regional president for Caesars Entertainment Corp.), the casino is ��talking with state gaming operators about reducing the casino��s mandatory employment requirement of 2,400 workers.�� However, Real additionally notes that the reduction would be a result of ��natural attrition�� and not a direct result of the ban and recent decrease in revenue.
Much as the casino��s patrons have learned to adjust to the ban, so, too, does Real believe Harrah��s business will eventually recover following the initial period of post-ban adjustment. ��We expect to see continued volatility in month-to-month revenue comparisons as we adjust to the operational challenges the smoking ban has presented,�� said Real.
Visit LVRJ for more on how Harrah��s New Orleans is handling its new smoke-free status.
First Earnings Report for IGT Following GTECH Acquisition Follows Expectations
Finally, in the spring we shared news of the huge $6.4 billion merger between Italian gaming group GTECH and the U.S.-based slot machine developer and distributor International Game Technology, with the final steps in IGT��s acquisition of GTECH having been finalized in April.
Shares of the newly-merged company now trade under the ��IGT�� name on the New York Stock Exchange, and in a second quarter earnings call earlier this week the company reported that its 2Q revenue was up year-over-year to $1.29 billion, an increase of 36%, although a comparison of the combined companies with both IGT and GTECH��s earnings in 2014 shows only a small increase of about 1%, as reported by Vegas Inc.
Meanwhile, thanks to increased expenses caused by the debt increase to help finance the merger, the company reports a net loss of $116.9 million compared to a net income of $55.2 million in 2014 2Q, all of which is in line with expectations says company CEO Marco Sala.
From Sala��s statement, Vegas Inc. shares his sentiment that the 2Q numbers indicate ��stable growth characteristics�� and ��meaningful sequential improvement.��
��We have accomplished a lot in the past four months,�� Sala added, ��notably organizing ourselves under a single leadership team and consolidating our manufacturing footprint,�� Sala said. ��There is much more ahead of us... we will continue to focus on integration to provide a solid foundation for future growth and value creation.��
For more on the new IGT, go to Vegas Inc.
Want to stay atop all the latest in the poker world? If so, make sure to get PokerNews updates on your social media outlets. Follow us on Twitter and find us on both Facebook and Google+!
