Amaya Corporate News: Job Losses After Full Tilt Merger And A New Deal With Playtech

Amaya Sheds Full Tilt Staff And Strikes A Slots Deal With Playtech

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Amaya migrated Full Tilt players to the PokerStars client in May, closing down forever the Full Tilt software.

Two months later the company is reorganizing, losing staff from positions related to Full Tilt, and relocating others to new posts within the organisation.

The main job losses are in the London office, while those who are relocated will move to the main headquarters on the Isle of Man.

The changes are not part of a major restructuring

The news broke on Friday, July 22 after sources revealed the plans to eGaming Review (paywall). Subsequently, Amaya VP for Corporate Communications, Eric Hollreiser, confirmed the plans.

Hollreiser explained that Amaya was getting rid of “a few dozen existing roles in several offices, while simultaneously creating a few dozen new roles in several offices.”

The implication is that the net level of job loss will be small, and investors should not think that a major restructuring is in progress.

When the closure of the Full Tilt software was announced, Rafi Ashkenazi, who was then CEO of the Rational Group, but now interim CEO of Amaya, said:

“Players will benefit from a larger pool of players offering greater game choice, bigger prize pools….It will also make us more nimble as we can focus our technological innovation on one platform, rather than two, so we will be able to innovate more quickly and enter newly-regulating and existing markets swiftly.”

The move to a single platform was inevitably going to produce job losses as a number of roles specific to the Full Tilt poker client disappeared.

Retaining the Full Tilt brand was an informed decision

After resurrecting the Full Tilt brand, the Rational Group soon introduced the facility for players to move their money from their account balances seamlessly between the two poker clients.

The use that players made of this facility will have given the company detailed information about what percentage of players enjoyed playing in both poker rooms and how many die-hard Full Tilt users existed who were committed to staying with the brand.

This will have allowed executives to determine what level of player attrition to expect for the various options Amaya had regarding Full Tilt.

The final decision to end the Full Tilt client, but retain the brand, will have been a compromise leading to the maximum in cost saving with the minimum loss of customers.

Full Tilt’s short lived experiment with a full-on recreational player model was introduced only a few months before the decision to merge the two player pools was taken.

The changes hit cash game traffic hard, but even so, they can be viewed as a useful experiment, from which Amaya will have learned lessons which can be passed on to managing the two brands as a single networked online poker room.

Deal with Playtech extends an acquired relationship

The second operational development of the week which will be of interest to investors is the extension of an existing relationship with Playtech which will see new slots games added to the PokerStars casino offering.

PokerStars casino games, which are accessible from a tab in the poker client, are partly provided by Swedish games developer QuickSpin.

In late May this year, Playtech struck a deal to buy Quickspin for €24 million, plus up to another €26 million in performance based payments.

The deal immediately put Playtech in the position of being a slot games supplier to Amaya. Playtech and Amaya have now agreed to expand the deal, and the three most recent releases from QuickSpin will soon make their appearance in the PokerStars casino client.

Playtech COO Shimon Akad commented:

“We’re delighted to have extended our existing relationship with PokerStars, one of the most established and well-known brands in the industry, and providing them with the industry’s best-performing content.”

Sam Hobcraft, PokerStars’ director of casino said:

“We are very excited to partner with Playtech, and to provide our customers some of the best slots in the industry. In particular, their suite of jackpot games will fill one of the final gaps in our product offering.”

Can more be read into the Playtech relationship?

In November last year, Playtech failed to create a new business vertical in FX and financial trading after regulators expressed concerns over the acquisition of Plus500 and Ava Trade.

This has left them with a considerable amount of money in their corporate treasury. The Plus500 deal was set to cost £460 million ($605 million).

Playtech’s current market cap of £2.8 billion, $3.7 billion, and comparatively low level of corporate debt has been seen as a signal that they are still very interested in acquisitions.

Some of that cash pile was spent earlier this month, when Playtech bought Best Gaming Technology for €138 million ($152.6 million), however, there is still plenty left for further corporate purchases.

More than one industry analyst, including OPR has speculated that they could be interested in buying Amaya. Amaya’s board has said that it is talking to several possible bidders, but no details have emerged as to who they may be.

Even though Playtech is a B2B company, there could be a strategic rationale for a takeover of Amaya.

Rafi Askenazi was Playtech’s COO before he joined PokerStars in February 2013, so communication and mutual understanding between the two companies would be off to a head start.

The newly announced deal with Playtech cannot be seen as indicating any level of interest that Playtech may have in buying Amaya, but it is conducive to speculation that the merger of the two companies would be easier to manage.

Such deals create better contacts amongst mid-level management that can help overcome the difficulties of combining two corporate cultures.

Speculation like this will continue until at least one of the potential bidders for Amaya puts its head above the parapet and goes public with its intentions.

- A former founder of Poker Industry Pro and Head of Content at PokerNews publisher iBus Media, Joss Wood is a graduate in English from the University of Birmingham. Joss also holds a master’s degree in Organisational Development from the University of Manchester. His career path has taken him from the British Army, through business and finance to seven years as a successful professional poker player.
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