parent company Amaya
discussed one of the most tumultuous quarters in the company’s history Monday in an earnings call that spanned the deeply positive
to the deeply negative
, along with many points in between.
The call covered results for the first quarter of 2016.
The webcast is available here.
Highlights from the 1Q16 earnings call
- The call was hosted by Rafi Ashkenazi, Interim Chief Executive Officer of Amaya. This was Ashkenazi’s first call after stepping in for former CEO David Baazov. Ashkenazi’s background on the product side allowed for a call with a greater level of specificity than past calls.
- The company declined to provide guidance for 2016.
- Casino and sport made up 21% of total revenue in 1Q16, aided by both growth in casino and sport along with a year-over-year decline in poker revenue.
- The Betstars sportsbook offering “remains in investment mode.”
- PokerStars has yet to engage in “external marketing” for casino, relying instead exclusively on cross-sell. External marketing is expected to start in the last quarter of 2016.
- “No material updates” on the Kentucky situation.
- Regarding Portugal – Ashkenazi anticipates re-launching in the “second half of 2016 subject to final licensing approval.”
- Israel Rosenthal is out as Rational COO on August 1. No replacement was named.
- Ashkenazi is “quite optimistic that regulation will be introduced” in Russia, possibly even “late this year.”
- Standalone mobile casino coming “hopefully by the end” of the third quarter.
- “Every month we see positive numbers” on Betstars in terms of active customers, handle, and other KPIs.
- The company declined to discuss potential bids for Amaya or the AMF situation.
Additional notes from the call
Ready for Euro 2016?
Ashkenazi indicated that the company hoped to be active in critical new markets for sports betting – including France – in time for Euro 2016, but admitted that the ultimate decision on that front would come from regulators.
Special committee update
From the press release accompanying the call:
“The Special Committee’s review of strategic alternatives is active and ongoing, with the goal of determining the best outcome for Amaya and its shareholders. Specifically, the Special Committee’s financial advisor, Barclays Capital Canada Inc., has contacted a range of strategic and financial parties who might be interested in a transaction involving Amaya. To date, several parties, including David Baazov, who is on a leave of absence as Chairman and Chief Executive Officer of Amaya, have entered into confidentiality agreements with Amaya. A number of these parties have received management presentations and are conducting due diligence.”
Not much mention of the US
Beyond a few mentions of PokerStars’ impressive performance in the New Jersey online poker market, there was effectively no mention of the market for regulated online poker in the U.S., even in the Q&A portion of the call.
Significant casino upside remains
The call painted a persuasive picture of the upside available in the online casino product. A few of the key points to that end:
- Amaya continues to integrate tier 1 casino content providers.
- Mobile product rollout continues.
- Dedicated marketing for the casino product has yet to begin.
- PokerStars has yet to begin a VIP offering on the casino side.
A positive April
Perhaps in lieu of guidance, or as a counterweight to the negative trajectory suggested by 1Q16 results, Amaya executives were quick to provide color around what sounds like a strong performance for April.
Highlights from the presentation:
Webcast is available here, full presentation available here.