PokerStars misses its earnings estimates
Amaya’s online casino games, sports betting couldn’t offset weakening appetite for poker
PokerStars owner Amaya Inc. reported fourth-quarter earnings that missed analysts’ estimates as new online casino games and sports betting couldn’t offset a weakening consumer appetite for poker.
Profit was 53 cents a share, excluding some items, in the period that ended Dec. 31, the Pointe-Claire, Que.-based company said Wednesday. That missed the average projection of 56 cents. Revenue from poker, Amaya’s main source of income, decreased 5.1 per cent from a year earlier. Adjusting for foreign-exchange rates, real-money poker sales would have fallen 1 per cent for the quarter and stayed flat for the year, Amaya said.
Online poker has been under pressure since the U.S. outlawed web-gaming companies and professional players started pushing some casual players away. While Amaya pared down the perks for skilled profes- sionals, the company has also been decreasing its reliance on the game, using a database of registered players in excess of 100 million to promote different options.
The company said poker accounted for 70 per cent of revenue compared with 78 per cent a year ago, while online casino and sports rose to 25.8 per cent from 17.2 per cent.
Last year was a turbulent one for Amaya. Founder David Baazov stepped down as CEO to fight legal charges in an insider trading probe. He had tried to take the company private before abandoning the bid in December. Amaya and William Hill Plc also ended merger discussions after U.K. activist investor Parvus Asset Management opposed the union.
Rafi Ashkenazi, who took over as CEO, is focusing on reducing debt and paying back a deferred payment to PokerStars founders while contending with legislation that could force Amaya to exit the Australian market. Amaya’s total long-term debt was $2.53 billion at the end of last year, according to the statement. Revenue and profit for the full-year 2016 were within the guidance range Amaya gave in February.