Amaya CEO Signals Companywide Shift from Poker to Casino Focus

During the PokerStars parent company’s recent fourth quarter (Q4) earnings conference call, Amaya chief executive officer Rafi Ashkenazi repeatedly made reference to the online gambling platform shifting its focus from poker to casino games and sports betting.

Ashkenazi revealed that PokerStars – the world’s largest online poker room – generated 70 percent of its revenue from that particular vertical over Q4 last year. That marks a significant decline from the 78 percent poker revenue share posted over the same period in 2015.

Conversely, the company’s recently developed casino and sportsbook was responsible for 25.8 percent of Q4 revenue, up from 17.2 percent in 2015.

Furthermore, the company’s quarterly net yield – a metric measuring real-money online gaming revenue per active unique users – increased to $114, marking an increase of 1 percent year-over-year. Ashkenazi was quick to observe that this slight uptick was “driven primarily by growth in casino yields, offsetting declines in poker yield.”

Overall, Amaya’s revenue for Q4 rose by 6 percent to $310.4m.

PokerStars recorded $217.2 million in revenue from real-money poker games, down 5 percent year-on-year.

The site’s combined casino and sportsbook operation increased quarterly revenue by 59 percent to $80.2 million. Of that amount, the lion’s share ($73 million) was won from approximately 648,000 active unique casino players, a population 47 percent higher in 2016 than the year before.

Speaking during the introductory phase of the earnings call, Ashkenazi commented on the synergy between PokerStars’ poker and casino / sportsbook platforms:

“We have been successfully marketing and cross-selling casino and sportsbook to our poker players with about one-third of them already playing casino.”

Ashkenazi also revealed that PokerStars Casino had grown into one of the world’s largest online casino platforms, as judged by active unique users, in 2016. According to him, Amaya will fully embrace the casino side of its business over the next year.

“In 2017, we expect our casino growth to continue by continuing to increase the quality of our offerings and number of casino games, increasing marketing investment in customer acquisition, including ramping up external marketing to attract casino focused players, improve our platform and marketing tools capabilities, maintaining the engagement of the existing casino players and continuing to cross-sell to poker players and launching a dedicated VIP program.”

In discussing the setbacks suffered by PokerStars’ various poker outlets, Ashkenazi cited the impact of currency fluctuations and an adjustment to the site’s player loyalty program, among other downgrades including:

“(T)he impact of anticipated cannibalization from our other product offerings, decreased poker revenues in Full Tilt, which was merged into PokerStars platform during the year and the closing of certain small jurisdictions.”

Ashkenazi also elaborated on PokerStars’ ongoing transition from a professional-centric business model to one emphasizing the importance of recreational players. As he described the shift, which involves leveling the proverbial playing field between pros and their prey, PokerStars is actively courting recreational players in hopes of spreading their action to other verticals like casino and sports betting.

According to Ashkenazi’s analysis, the impending departure from Australia will accelerate poker’s decline in terms of revenue share, but he stated that Amaya hopes to record a “flat year-over-year in poker revenues after pulling out” of the country.

Also of note, the CEO mentioned that Amaya is considering changing the company name, telling conference call attendees that “we plan to seek shareholder approval to change our corporate name to better reflect the company we are today and the company we aim to be in the future.”