But overall, management gives the impression of a company moving forward and recovering from a difficult year.
In summary, CEO Rafi Ashkenazi said:
“2016 was a record year of revenues for Amaya. Our proactive changes to the poker ecosystem and customer acquisition initiatives continue to reverse certain negative trends and we are starting to see organic growth in that business.
Our casino offering exceeded expectations as we introduced limited marketing campaigns and focused on our cross-sell efforts, and we continued to build and develop our sportsbook.”
A variety of factors contributed to the five percent decline in online poker revenues. But notably, Rafi Ashkenazi did not suggest that they were part of a more general decline in online poker.
He explained that there were some cannibalization from the cross-selling of casino and sportsbook, PokerStars’ exit from some smaller markets for regulatory reasons impacted figures.
The declining revenues were partially offset by the VIP club changes and rake increases introduced in early 2016.
Top of Ashkenazi’s list of objectives for 2017 is growing online poker. To achieve this growth, he told investors that Amaya would be investing more in innovation, especially in mobile.
Ashkenazi also had hopes for some market expansion, with plans to enter the market in India in the second half of 2017.
There is also the possibility that Amaya could enter the Netherlands market. But the glacial pace at which the country’s new laws are being introduced make that an uncertain proposition.
The subtext to investors was that Amaya thinks it will do the same in other newly regulated markets.
In reply to a question about any tailwinds or headwinds that might affect revenues in 2017, Ashkenazi suggested that there was a possibility of a positive benefit if France, Spain and Italy share liquidity.
CFO Daniel Sebag produced the party line on whether it will exit the Australian online poker market if new legislation passes. Sebag said that it was “likely” that PokerStars would leave.
However, in answer to an investor question, Ashkenazi said, “We are going to pull out of Australia very soon.”
Support for Ashkenazi’s certainty comes from the forward guidance for 2017 revenues. A note explains that one of the management assumptions is “the cessation of real-money online poker offering in Australia by the end of April 2017.”
No other market exits are currently in view, although Ashkenazi said that Amaya will have to make a decision to either exit the South American market in Colombia, or apply for a license.
Colombia is currently implementing new laws to regulate online gaming. On the face of it, the market appears relatively attractive to offshore operators.
It would be a surprise if Amaya did not apply for a PokerStars license in one of South America’s most advanced countries.
No separate information was given about New Jersey other than the fact that PokerStars had successfully entered the market. The only snippet of financial information available is that Amaya paid $111,000 in regulatory fees in 2015. The company paid nothing in regulatory fees in 2016.
Although the financial statements mentioned the outstanding legal action in Kentucky, the management offered no comments to investors.
Amaya was fined $870 million in Kentucky, including punitive amounts for the activities of PokerStars before Amaya became its owner. The company strongly disputes both the verdict and the amount of the fine.
The entire investor conference call managed to avoid mention of former chairman and CEO David Baazov. He founded Amaya and turned it from a start-up to a multi-billion dollar corporation.
A disastrous set of results in Q3 of 2015 and an insider trader investigation in his home province of Quebec have tarnished his star. He also took up a considerable amount of management time with a failed bid to buy Amaya in early 2016.
Perhaps Rafi Ashkenazi was making a veiled reference to Baazov when he told investors, “The Amaya you see today is quite different to the Amaya of 2015.”
Ashkenazi said that the company wanted to change its name to reflect the new reality. He also said Amaya would be consulting shareholders during the year to approve the change.
It looks just a little bit like Amaya is attempting to distance itself from its former CEO.