What Does Yahoo Poker’s Closure say about the State of the Industry?
Amaya, the company behind PokerStars, has releases its latest set of figures, showing that casino and sports products have contributed more revenue than ever before. Meanwhile, the poker vertical has shrunk 11% in the first quarter of 2016 when compared to the same quarter last year. The closure of Full Tilt and smaller player deposits were cited as reasons for the lower poker revenue, in addition to the gains made by casino gambling and sports betting.
Amaya have presented their Q1 2016 figures this week and a clear trend has emerged – the casino and sports branches of the company are cannibalizing the poker side of business. Coupled with the legal troubles that the now absent CEO Baazov is facing and trying to gain entrance to the Italian and French markets before the first ball is kicked off in the Euros 2016, this is already shaping up to be quite a year for the gambling giant Amaya.
Overall Revenue Rise, Yet Poker Revenue Lower
For the first three months of this year, the revenue of Amaya was reported as having increased by 6% to a grand total of $288.7 million. Meanwhile, the net earnings from all its operations have more than doubled from Q1 of 2015, now standing at $55.5 million.
Namely, the biggest poker brand PokerStars that is owned by Amaya raked in the most revenue – 75% of all total revenue was gained through this poker network. Casino and the recently launched sports betting came together to contribute 21% to the revenue share. When compared to 2015, it becomes quite clear how this has played out: PokerStars revenue has shrunk by 13% (from 89%) whereas casino/sports grew by a huge 15% (from just 6%).
If we look at it from a slightly different angle, it becomes evident that the growth of the casino games and the betting on various sports was over 250% year-on-year. That’s massive! However, this cannibalism of poker – and PokerStars commands over 70% of the world’s online poker traffic – and the gains made by casino and sports aren’t the only reasons that the PokerStars revenue has shrunk.
A few of the other cited reasons were the dismemberment of Full Tilt, another Amaya brand that’s been a poker powerhouse in the past, and the mass exodus of high rolling players as the changes to VIP programme were implemented.
What The Rest Of 2016 Holds For Amaya
Despite the shrinking poker revenue, Amaya’s CFO Daniel Sebag has said that the revenue from recreational players was better in Q1 of this year than ever before. This is exactly the goal and the future of the PokerStars, as recreational players are heavily targeted with the new business strategy of Amaya.
Expanding into new markets is also on the cards for this massive gambling company as its casino/sports product currently operates in less than half o of the ‘addressable’ markets. Namely, 59% of the Amaya market still have to get their hands on the BetStars – the casino games and sports platform of Amaya. As we already mentioned, two key countries of France and Italy are first contenders on that list, just in time before the European Football Championship 2016 kicks off this summer.
Furthermore, a new VIP programme will be developed and implemented on BetStars with hopes of attracting even more players. Focusing on mobile gamblers and deposits made via mobile devices, Amaya have their hopes set on continued growth from both casino/sports and poker in 2016.
And don’t forget that new CEO and COO appointments are still upcoming, which will shake up the company and its executive board even more. Watch our news feed for all the latest news!
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