Inside Gaming: Amaya Jumps in DFS with Victiv Acquisition, to Rebrand as StarsDraft
This week’s Inside Gaming shares yesterday’s news regarding Amaya’s acquisition of Victiv and its plans to become a bigger player in the daily fantasy sports market and a report on IGT’s first earnings report after having acquired GTECH.
Amaya Acquires Daily Fantasy Sports Site Victiv; StarsDraft Coming Soon
Yesterday’s big industry news was the announcement that Amaya Inc., the Montreal-based online gaming company that just over a year ago acquired PokerStars and Full Tilt, has now acquired the daily fantasy sports site Victiv. The site will be rebranded as StarsDraft with initial plans to launch in U.S. markets and then later through the PokerStars platform, and the current Victiv team will continue to manage the business going forward.
Based in Austin, Texas, Victiv has been part of the burgeoning daily fantasy sports scene for just under a year, and currently exists as part of the growing chase pack of sites behind industry leaders DraftKings and FanDuel. Victiv currently is available in 45 of 50 U.S. states, excluding the five (Arizona, Iowa, Louisiana, Montana, and Washington) in which daily fantasy sports is not considered legal.
According to Amaya’s announcement, Victiv has distinguished itself already, however, thanks to “its user-friendly and innovative software.” In a conference call discussing 2Q results, Amaya CEO David Baazov underscored the functionality of Victiv’s site as having helped encourge the acquisition, noting that Amaya made the choice after having considered the technology offered by 12 different DFS companies.
Expectations were tempered somewhat, however, regarding the size of splash the new StarsDraft site will initially make in DFS, as well as the extent to which Amaya will be pushing the new site. “The market still has to mature more for it to appreciate to a size where we would be willing to make any significant investement,” said Baazov, as Toronto’s The Globe and Mail reports.
In the accompanying press release, Victiv CEO Matthew Primeaux was enthusiastic about new arrangement. “StarsDraft will combine Victiv's innovative platform and experienced DFS team with Amaya’s expansive consumer base and operational excellence as the world’s preeminent online gaming brand,” said Primeaux.
“We intend to capitalize on what we believe is strong crossover between online poker players and daily fantasy sports,” Primeaux added. “PokerStars is the most-trusted brand in online gaming and brings unmatched security, customer support and technical infrastructure that we believe all players can rely on.”
The release also highlights the site’s “Bankroll Builder” free-to-enter contests as a ready means to attract new DFS players by giving opportunities to win money without depositing.
The timing comes just weeks away from the start of a new NFL season, something Kevin Wright of Canaccord Genuity (a Canadian investment and banking company) referenced in a report shared by The Globe and Mail.
“The daily fantasy sports space in North America has significant potential and we view the PokerStars marketing and operational experience as an investment positive as it builds a presence,” wrote Wright, who estimated the potential market for DFS to grow to $1.2 billion by 2020.
During the earnings call Baazov additionally confirmed that Amaya had withdrawn from entering into a partnership with GVC Holdings PLC in order to purchase bwin.party Digital Entertainment PLC.
Visit The Globe and Mail for more on Amaya’s acquisition of Victiv and the potential impact of StarsDraft on the DFS market.
First Earnings Report for IGT Following GTECH Acquisition Follows Expectations
Finally, in the spring we shared news of the huge $6.4 billion merger between Italian gaming group GTECH and the U.S.-based slot machine developer and distributor International Game Technology, with the final steps in IGT’s acquisition of GTECH having been finalized in April.
Shares of the newly-merged company now trade under the “IGT” name on the New York Stock Exchange, and in a second quarter earnings call earlier this week the company reported that its 2Q revenue was up year-over-year to $1.29 billion, an increase of 36%, although a comparison of the combined companies with both IGT and GTECH’s earnings in 2014 shows only a small increase of about 1%, as reported by Vegas Inc.
Meanwhile, thanks to increased expenses caused by the debt increase to help finance the merger, the company reports a net loss of $116.9 million compared to a net income of $55.2 million in 2014 2Q, all of which is in line with expectations says company CEO Marco Sala.
From Sala’s statement, Vegas Inc. shares his sentiment that the 2Q numbers indicate “stable growth characteristics” and “meaningful sequential improvement.”
“We have accomplished a lot in the past four months,” Sala added, “notably organizing ourselves under a single leadership team and consolidating our manufacturing footprint,” Sala said. “There is much more ahead of us... we will continue to focus on integration to provide a solid foundation for future growth and value creation.”
For more on the new IGT, go to Vegas Inc.