Victiv Acquisition May Provide US Foothold for Amaya
Amaya announced in a press release this morning that it has acquired daily fantasy sports (DFS) site Victiv. The news accompanies today’s Q2 earnings call, and was foreshadowed in the previous earnings call in March, when Amaya CEO David Baazov formally confirmed earlier hints that Amaya was going to enter the DFS sector.
The two major players in DFS currently are DraftKings and FanDuel, while Victiv has been a reasonably successful second-tier site. Of course, it’s unlikely that it will be playing second fiddle for long, given that Amaya owns PokerStars, which holds about a two-thirds share of the online poker market. Ever since Baazov’s initial statement about entering the DFS market, the intention to integrate DFS with the PokerStars brand has been explicitly clear.
Indeed, although Victiv’s staff, software and player base will be retained, the name itself will not be; the press release states that Victiv’s services will be moved to a new site called StarsDraft.com (where you can already find a placeholder site) and, most importantly, eventually integrated into the PokerStars platform.
Most of the discussion about this move has so far focused on the DFS market and how Amaya will fare against DraftKings, FanDuel and Yahoo!, another major company which has recently taken the plunge into DFS. It’s possible, however, that the strategic advantages to PokerStars’s core business are equally or more important to Amaya than the money that will be made directly from DFS.
The biggest problem facing PokerStars these days is, after all, the inaccessibility of the US market since Black Friday. The legal wheels are still turning on that issue, but it’s clear that PokerStars is banking to a fair extent on the possibility of being allowed back in; part of the reason for the reverse takeover by Amaya may in fact have been to separate the company from its previous owner Isai Scheinberg, whose outstanding criminal charges in the US would likely have made its re-entry impossible even with new regulatory legislation.
The trouble is that even if PokerStars does find a way back into the US market, their probable main competitor there already holds a big head start. A few states – currently Nevada, New Jersey and Delaware – have already allowed legal, regulated online poker, and 888Poker has been operating in those states from the start. Meanwhile, 888 may be on the verge of acquiring bwin.party, whose brands would give it a practical monopoly on the current US market.
Despite the worldwide popularity of the PokerStars brand, this strategic disadvantage could put a damper on potential profits if and when PokerStars is allowed back in. That’s where StarsDraft could prove extremely important. Given that the intention is to integrate it with the PokerStars platform, that could mean a pre-built user base and a seamless transition for those users when the day comes.
For PokerStars users in the rest of the world, it seems that the experience being promised is that some day soon, they’ll be able to place DFS bets directly from their PokerStars accounts. Depending on how regulatory efforts go, the converse might end up being true for Victiv/StarsDraft users: That one day they will wake up and suddenly be able to play poker on PokerStars with funds from their DFS accounts. If that comes to pass, it’ll be huge for Amaya and more than a little worrisome for 888, especially if StarsDraft does end up giving DraftKings, FanDuel and Yahoo! a run for their money in the meantime.
Alex Weldon (@benefactumgames) is a freelance writer, game designer and semipro poker player from Montreal, Quebec, Canada.