Amaya's David Baazov Interview About Investigation and PokerStars

David Baazov: Amaya Is Growing Without The U.S. Online Gambling Market

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Amaya CEO David Baazov gave an interview to Canada’s Business News Network this week in which he touched on a few key points:

  • The investigation involving the company by security regulators in Quebec.
  • Amaya’s deal to buy PokerStars.
  • Thoughts on regulation in the US.
  • Amaya’s ability to repay debt.

The full interview can be viewed here.

Securities investigation “anticipated”

Baazov told the BNN that Amaya “anticipated” the investigation currently underway by securities investigators in Quebec, spurred by the tremendous gains Amaya’s stock experienced last summer.

The company’s stock price has partially recovered from the drop experienced in the immediate aftermath of news of the probe, and Baazov denied that anyone from within the company acted improperly.

“I would say that the investigation for us is something that we anticipated given that there was a historical stock run-up in advance. I think the AMF is looking into something that they should be looking into and looking into what has led to that stock run-up,” Baazov said.

“We have no evidence to believe that there’s any wrongdoing by any officer, director, or employees and we’re cooperating with the investigation.”

The PokerStars deal – optimism is the word

Speaking to Amaya’s acquisition of PokerStars, Baazov acknowledged that it was a complex situation with “a lot of moving parts” yet repeatedly used the word “optimism” when discussing it.

“A big part of it was confidence, optimism, and an opportunity that we saw in an underlying company that the fundamentals were really good in. We saw what we wanted to do with this from our vision and […] a lot of optimism,” he remarked.

“Once we got buy-in from some of the investment anchors, i.e. GSO, some by Blackstone, and Blackrock, etc., that was a defining moment probably that helped spur some positivity but this was a transaction that was very, very difficult to put together, and well into the late stages.”

When asked if a similar deal might come together in the future, Baazov again was optimistic, if necessarily vague.

“I would definitely say so,” he said. “At Amaya, we don’t think anything is impossible.”

“We’re going to go for it. We have a lot of confidence, optimism. That stems from our people. I’ll always bet on my staff and my people. What we’ve accomplished can be accomplished by others and we hope it is.” Baazov told BNN.

Regulation is Amaya’s aim

When asked what Amaya is doing to craft a more favorable regulatory environment, particularly in the United States, Baazov was quick to point out that the company is already heavily licensed in the US.

“We continuously lobby for more regulation, not just in the US, but in other jurisdictions as well,” said Baazov.

“More and more jurisdictions are regulating, so I’d say the US is a big market that we plan to be in. But what I think a lot of people don’t understand is that Amaya already has over 60 licenses in the US. So, we’re already more regulated in the US than any other iGaming company.”

When asked how many US licenses Baazov expects Amaya to hold within five years, Baazov didn’t state an explicit figure but rather expressed hope that more states will choose to regulate online gambling in coming years.

“We want to see a lot of states come on here,” he commented.

“Currently we have 60 [licenses] in the US […] worldwide we have over 100. And so I think that that’s going to continue to grow from a regulatory perspective and we’re going to get more licenses. But what we want to see is more jurisdictions embrace this so that there’s responsible gaming.”

“I think that a regulated environment is truly the best one,” Baazov said.

Amaya “growing without” the US market

Finally, Baazov addressed the issue of Amaya’s debt – specifically how it intends to pay it off in the absence of growth in US.

“Currently we’re not generating real money gaming revenue from the US,” Baazov answered.

“So the US is huge growth for us and I would say that we’re growing without it today. We just announced a buyback of shares, actually, earlier in the week. Considering that we can announce a buyback of shares with our debt and our lenders are comfortable, I think it’s a very positive sign of our ability to repay it.”

When asked, Baazov couldn’t say whether Amaya might choose to tap equity markets to raise funds in the future, saying that it would depend on timing.

- Kim focuses on the intersection of online gambling and state regulatory issues in her work for OnlinePokerReport and a variety of other industry publications.
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