Baazov Moves Full Tilt To Be A Poker Star

In what industry watchers have called a huge gamble, Mr. David Baazov has bought up two of the largest online poker sites on the net today, but will it pay off or will this be a busted flush?

On October the 6th a federal judge will hear arguments from Governor Chris Christie as he seeks to get the legal right for casinos and racetracks to offer sports betting within the state of New Jersey. Should this request be granted there would almost certainly be a follow on legalization of online sportsbooks in the US, or those part of it that follow New Jersey’s lead. This growing tidal change of attitudes to gambling both off and online currently sweeping across states as diverse as California and Rhode Island, is having a massive effect on the industry as a whole, and there are some that are positioning themselves now for the good times they see as yet to come.

Online Poker Sites Bought By Baazov

• PokerStars and Full Tilt Poker Acquired for $4.9bn

• Gamble on future of online & mobile casinos in the US

• Asian and European Markets may be key

David Baazov, the Israeli born millionaire who grew up in Montreal, is CEO of the Amaya Gaming Group which has just bought up the company that owns the well known online entities “PokerStars” and “Full Tilt Poker” thus at a stoke buying himself a huge chunk of the online poker business in readiness for the online gambling revolution that looks to be about to kick off in the US. With wide experience in the provision of technology solutions to the online gaming world this new Canadian player is hoping his $4.9bn acquisition is a gamble that pays off.

Of course as Mr. Christie would be only too quick to point out there are some inherent instabilities in the massive US gambling market. Having stood in front of Atlantic City’s Revel casino’s completely construction and heralded it as the savor of the local economy the Governor will be only too aware that just two years later the $2.4bn building now stands empty. Casino gambling is suffering from its own success as more and more states and investors attempt to gain greater profits from a static participation market, and the addition of online gambling is unlikely to have anything but a negative effect on it.

Anything that negatively effects the casinos on which local economies have staked their futures is likely to face political pressure against it when it comes to the seemingly mandatory referendum with voters at the ballot box given the chance voice their support or dissent. Massachusetts state legislature might have legalized casino gambling, and Steve Wynn has won the right to build one, but this November the votes could vote it all away if they were to vote for repeal of the law. They won’t, in that particular case, but they might. The degree to which gambling is still a political football means that online gambling sites in the US don’t face a smooth path ahead.

86 Million Players Can’t Be Wrong

Not that this seems to worry the 33 year old Baazov who feels that the legal, regulatory and social issues that a move into the market might throw up can all be overcome and that the current reticence of the big US banks who, having watched one too many gangster movies, dislike having anything to do with the gambling industry, particularly the online gambling industry. However should the market be there it is felt the banks and credit card companies will soon change their tunes, the question is, can the market be created without them in the first place? The fact is of course that PokerStars and Full Tilt Poker already have a market, and its one they’ve done very well out of.

Between the two sites they have a roll of some 86 million registered players, and whilst expanding those numbers will obviously be a manifest goal there is also to be an emphasis placed on cross-connection wide-front expansion with the use of a range of means to achieve a higher participation rate as well as attracting more players per se. With a strategy set to employ all the modern technology delivery systems and platforms, from mobile apps and social media nodes, to online gaming and partnerships with bricks-and-mortar casinos, there is a definite eye on a marketing led approach.

“The exciting part of this,” says Mr. Baazov, “is that it comes with 86 million customers. Not 86 million gamblers specifically; 86 million customers.” A comment which on of itself should indicate that this will be a change in the very core of the market with the gambling sites’ players being leveraged by and then in other spheres of commercial activity. “We expect to acquire additional customers,” he continued, “and bring them into the mix, that may be specific to poker, but really expand that customer base.” That new attitude that sees people who participate on online poker sites in the US as customers instead of merely gamblers or players, may well prove to be the underwritten promise of a future of commercialization not just of products and services but the customers you have attracted to them.

Certainly PokerStars and Full Tilt Poker are in of themselves profitable businesses but the level of debt that Amaya Gaming Group took on when taking them over could well limit the amount of time they can hold onto them, and pressure them to gain as much as possible as quickly as possible, perhaps even to the detriment of the core business as they attempt to diversify beyond the gambling realm. The social media monster that lurks everywhere these days has been as often turned on those who attempt to use it as it as been successfully used. It remains to be seen if Mr. Baazov’s team can tame this beast or will be bitten buy it.

European And Asian Markets Challenging

Of course whilst the US is an important and lucrative market, it’s not the only one into which greater penetration will be necessary if a success is to be made of this big poker buy-up, something Mr. Baazov is all too aware of. “From a broader perspective I think that poker is going to grow regardless of the US,” he said. “The game of poker is going to grow not just domestically but internationally.” And it will be these “international” markets across Asia and Europe upon which short term success may hinge as the Americans lag behind as they settles their scrappy political fights over gambling laws in the US and its component states where casino owner and poster boy for the 1% Sheldon Adelson is spending millions to get a federal ban on online gambling imposed.

The fact that such rich, powerful and influential people stand to lose much by the introduction of online gambling in the US means that the Asian and European markets are of great importance to Mr. Baazov and his team, but even there issues abound making this less than straightforward. The large UK market will soon have a new law imposed (current estimates say November 1st) after which all entities wishing to provide gaming opportunities to the UK population’s gamblers will need to a license to do so from the UK government, and it is unlikely to come cheap.

In Asia social attitudes and governmental reticence holds online gaming back from the biggest market of all, China, where most gambling has been illegal since 1949 and Macau’s “special economic status” success hasn’t made authorities consider online gambling any more favorably. Japan has sought to control and limit online gambling (and some would say they’ve failed) and several other nations in the region face problematic social attitudes to the whole industry. Massive investment in resort casinos around the region seek to combat that, but authorities can use firewalls to block websites, it is a little more tricky to stop people jetting off on holiday.

These limitations, amongst others, mean that the gamble Mr. Baazov has undertaken, for very large stakes, is not the sure fire winner that he would wish it to be, but there is certainly room for a massive profit should the cards fall his way. China’s ongoing liberalization is as unpredictable as the slide into bureaucratic stagnancy is in the US, and whilst it wouldn’t be prudent against the successful business acumen of Mr. Baazov, it’s going to be an uphill struggle to marry the technology’s advances with the political and social relative immobility.