Thursday, August 18, 2016

Amaya Gaming reports second quarter earnings

I linked the Amya Gaming second quarter earnings report presentation. Earlier in the year when the stock tanked on the previous CEO's alleged insider trading charges I recommended buying shares. I like this company because it has over a 70% market share in the online poker industry.

Although the popularity of poker has decreased from a couple of years ago there is still a large amount of people who play online. Amaya has been diligent in trying to open new markets for poker like New Jersey where they have an almost 50% share of the market. They will continue to advance on this front and I suspect additional markets will open as time goes on. Remember that the government is not against gambling they just want to make sure they can regulate and tax it.

The other thing I like about Amaya is the move into online casino and sportsbook that they have started in the last year. Although poker revenue is basically flat the sportsbook and online casino are growing very fast (up 89% this quarter). This is from a small base but the growth is big and has been done mostly through cross marketing to Amaya's existing poker customers. This means that advertising and customer acquisition cost has been minimal.

The other big news is the permanent appointment of a new CEO to take the place of the founder CEO who is still being investigated for insider trading of company stock. I would like to stress that the investigation to this point has been focused on the CEO and to this point no allegations have been made against Amaya.

The other news is that the company some months ago engaged various parties in discussions to maximize shareholder value which could mean a sale at some point. Overall I like what I continue to see out of Amaya and I will continue to hold the stock.

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