WEEKLY FEATURE: PokerStars Clean?

Amaya Gaming last week announced it has completed its acquisition of PokerStars and Full Tilt. The announcement came shortly after Amaya stockholders approved the $4.9 billion deal. With the removal of former owners and “bad actors” Mark and Isai Scheinberg (l.) how long will it take before New Jersey allows PokerStars to operate online gaming in the state?

It’s official. Amaya Gaming owns PokerStars.

The company announced that it has completed its purchase of Oldford Group and transferred Rational Group, PokerStars and Full Tilt to the Canadian gaming supply firm.

“We are extremely pleased to have completed this acquisition,” said David Baazov, CEO of Amaya in a press release. “Through PokerStars, Full Tilt and its multiple live poker tours and events, Rational’s brands comprise the world’s largest poker business, generating diversified and recurring revenues across the globe from its extremely loyal customer base.”

The purchase was a $4.9 billion all-cash transaction and also includes the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asian Pacific Poker Tour events.

Amaya Gaming shareholders approved the transaction a few days before the announcement and also approved the creation of new financial instruments such as convertible preferred shares and warrants to facilitate the acquisition.

The sale means PokerStars founders Mark and Isai Scheinberg no longer have an interest in the company. Their involvement has blocked PokerStars from getting regulatory approval to operate in the U.S. Isai Scheinberg is still under indictment stemming from the U.S. Department of Justice shutdown of illegally operating international poker sites in the U.S. in 2011.

“Since launching PokerStars in 2001 we have grown the business each year thanks to constant innovation, unparalleled customer service, and the talent of our dedicated workforce,” Mark Scheinberg said in a press statement. “I’m confident that Amaya, together with Rational Group’s leadership, will continue to successfully grow the business into the future.”

Amaya is already working with regulators in New Jersey and could launch online play in the state by the fall. The company is also hoping to enter a potential California online market, but could be blocked if the state enacts a “bad actor” clause in its potential legislation.

According to reports, the price paid by Amaya was financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares, allocated as follows:

• (US)$1.05 billion of convertible preferred shares, $600 million of which were subscribed by funds or accounts managed or advised by GSO Capital Partners LP or its affiliates. Terms of the convertible preferred shares are included in the Corporation’s Management Information Circular dated June 30, 2014, which was filed on SEDAR.

• C$640 million of subscription receipts at C$20 per subscription receipt which were automatically converted on a one-to-one basis into common shares upon closing of the acquisition.

• Certain funds or accounts managed or advised by GSO Capital Partners LP or its affiliates purchased $55 million of common shares at C$20 per share.
• Senior Secured Credit Facilities in the aggregate principal equivalent amount of approximately $2.92 billion.

Amaya now waits for approval from New Jersey’s Division of Gaming Enforcement on a deal with Resorts Atlantic City for PokerStars to operate that casino’s online gaming. DGE Director David Rebuck told GGB News earlier this summer that expected “no surprises” during the investigations that would allow licensing for the PokerStars deal.