Montreal’s Amaya Gaming to Buy PokerStars for $4.9 Billion

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Mark Scheinberg & Isai Scheinberg
Mark Scheinberg & Isai Scheinberg

There have been rumours over the past few weeks about PokerStars being acquired by Amaya Gaming, a small publicly-traded Canadian supplier of online gaming software and equipment. Well its officially out in public that PokerStars, the world’s biggest online poker company, has agreed to sell itself for $4.9 Billion.

Since the rumours began, the stock of Amaya Gaming has nearly doubled. But how can a company fraction of the size of PokerStars get so ambitious? No it is not a reverse takeover, but the deal is being backed by Blackstone’s credit division, GSO Capital Partners which will buy more than $675 million in convertible preferred shares and other securities. Other financiers include Deutsche Bank, Barclays and Macquarie Capital who will provide $2.9 billion in credit facilities and other financing.

PokerStars which started its journey in Canada after being founded by Israeli-Canadian former IBM computer programmer Isai Scheinberg, has been stationed in the Isle of Man over the past few years while the company continues to accept players from the United States in the wake of UIEGA, a move that help them achieve the status of being one of the largest gaming empires in the world and surely the largest online poker room.

A series of indictments filed by the United States Government two years ago forced PokerStars and other sites like Full Tilt and Absolute Poker out of business in the USA and put the owners at large. Still, PokerStars was the only website of the bunch that managed to meet payment demands to former players and to the US Government by way of a settlement while acquiring Full Tilt, a deal that would help clear the company. The company did not admit any wrongdoing and Isai Scheinberg remained under indictment and has not come to the U.S. to face the charges.

With the regulation in the lucrative US market looming, to date, PokerStars have not been able to secure a much-wanted gaming license due to bad actor clauses put forth in the various states that have begun to regulate. A partnership with Amaya could ensure that the PokerStars sees US soil sooner than later, especially since Amaya already possesses a license in the State of New Jersey.

PokerStars posted revenues of $1.1 billion last year and earnings before interest, taxes, depreciation and amortization of $420 million.

The Scheinbergs will not remain with PokerStars in any capacity after the deal closes. In a statement announcing the deal, which includes both PokerStars and Full Tilt, Amaya Gaming said it believes the “transaction will expedite the entry of PokerStars and Full Tilt Poker into regulated markets in which Amaya already holds a footprint, particularly the U.S.A.”

There is no word whether the operations of PokerStars will move back to Canada.

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