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Amaya buying PokerStars, Full Tilt owner for $4.9B

AP - Sports

NEW YORK (AP) -- The owner and operator of the PokerStars and Full Tilt Poker brands is selling itself to Amaya Gaming Group Inc. in a $4.9 billion deal that is part of its plan to hopefully return to the U.S. market after a dustup with federal authorities three years ago.

PokerStars and Full Tilt ran into some trouble in April 2011 when the U.S government seized their websites and charged executives at the companies and people that move money for them with fraud and money laundering. In July 2012 PokerStars reached a settlement with the Justice Department in which it agreed to pay the government $547 million over three years. At the time the company said that the money was to be used in part to reimburse former U.S. customers of Full Tilt Poker, whose assets PokerStars had acquired.

Amaya said late Thursday it believes the acquisition will expedite the entry of PokerStars and Full Tilt Poker into regulated markets in which it already has a footprint, especially the U.S. Amaya makes gaming machines and systems, and says the PokerStars business is complementary with little overlap.

Internet gambling in U.S. has been off to a slower than anticipated start, with experts saying that it is being held back by illegal offshore operators who are continuing to draw users and siphon off millions of dollars. The first legal online U.S. poker company opened a little over a year ago. Since that time the industry's growth has been slowed by several factors, such as technical hurdles and laws limiting players to the three states - New Jersey, Nevada and Delaware - where Internet gambling is legal.

Still, experts believe that there is plenty of room for growth for online gambling in the U.S.

PokerStars and Full Tilt are owned by Isle of Man-based Rational Group Ltd., whose parent company is privately held Oldford Group Ltd.

Canada's Amaya said the deal with Oldford will make it the biggest publicly traded online operator of casino games.

Justin Kew of Cantor Fitzgerald Canada said in a client note that the transaction is a ''watershed acquisition'' for Amaya that will increase its revenue and adjusted earnings by more than eight times. The analyst tripled Amaya's price target to $25.50 Canadian dollars ($23.49) from $8.50 Canadian dollars ($7.83). He reaffirmed a ''Buy'' rating.

PokerStars - the world's biggest online poker website - and Full Tilt Poker have more than 85 million registered players on desktop and mobile devices. Online poker services provided by PokerStars and Full Tilt Poker will not be affected by the transaction.

The boards of Amaya and Oldford unanimously approved the deal. Amaya doesn't anticipate making any changes to its board related to the transaction.

The deal is expected to close by Sept. 30. It needs the approval of Amaya shareholders, who will vote at its rescheduled annual meeting, now set for July 30.

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