Rumour: Scheinberg´s to Buy Back PokerStars

PokerStarsAccording to Pocket Fives co-founder Adam Small, the big rumour circulating around G2E was that the Scheinberg´s are going to buy PokerStars back from Amaya.

Last week, the Global Gaming Expo (G2E) took place at the Sands Expo Center in Las Vegas. G2E is one of the leading events of the year for the online gaming industry and attracts many of the world´s top industry professionals.

In addition to reviewing the latest technical advances and hearing what gaming experts have to say in the special “education sessions”, attendees also use G2E to network and keep up to date with the latest industry gossip and rumours.

According to a public conversation on Twitter yesterday, one of the biggest topics of discussion at G2E was the possibility that the Scheinberg family – the founders of PokerStars – were intending to buy back the world´s largest online poker site from the company they sold it to in 2014 – Amaya Inc.

What was Actually Said on Twitter

The conversation started with Adam Small – co-founder of the Pocket Fives online poker community – making an observation on the former CEO of Amaya Inc. – David Baazov – failing to appear at a hearing of Quebec´s financial regulator. Baazov is being prosecuted by the Autorité des Marchés Financiers (AMF) for five counts of securities fraud.

Small´s observation was corrected by “Grange95”, who replied to the Tweet by stating the DoJ did not actually remove the Scheinbergs from the company. The family chose to sell PokerStars to Amaya Inc. so that PokerStars could get a license to operate in New Jersey. “poker_hack” then joined the conversation by commenting that there were roughly five billion other reasons why the Scheinbergs sold PokerStars.

The conversation then took a dramatic turn when Small tweeted:

When asked about the source of this claim, Small replied:

A Wild Piece of Gossip or a Realistic Possibility?

Several factors come into play when considering whether the rumour is a wild piece of gossip or a realistic possibility. The first is that Adam Small is a respected industry professional who is not prone to spreading unsubstantiated rumours. The second is that Small claims to have heard the speculation from several different sources at G2E – an environment in which there would be more people in the know than any other. Then there are the financial factors.

Recent events would suggest that there is only a limited future for PokerStars in the US. The site has failed to become the dominant force in New Jersey and averages just over one hundred cash players a day. PokerStars is likely to be banned from a regulated Californian market for five years and, with Pennsylvania the only other state likely to regulate online poker within the next three years, there seems little justification in investing a great deal of resources in order to obtain licenses in the States.

The timing of the rumoured buy-back would also appear to make financial sense for the Scheinberg´s. Amaya Inc. has a current market valuation of $2.35 billion on Nasdaq, implying that the family could buy back PokerStars for less than half of what they sold it for. Although Amaya´s shareholders might have something to say about that, Baazov and thirteen others who allegedly profited from insider trading on the PokerStars deal, could probably do with the money if the charges against them are proven.

What a Buy-Back Might Mean for PokerStars

If the buy-back was to happen, it is unsure how many of the changes implemented by Amaya during its tenure would be rolled back by the Scheinbergs. Efforts will undoubtedly be made to recover the goodwill lost under the current corporate structure, and the return to the company´s former principles of putting players first – rather than shareholders – will likely see a growth in the number of players at the tables.

High value players will be hoping for the return of the Supernova and Supernova Elite reward statuses, while many former Full Tilt players will hoping that the integration of the two sites is reversed and they can return to playing on the superior software and enjoying a wider variety of games. The question of the site´s perceived “wasteful” sponsorship of the Global Poker League might also be put under the spotlight.

One important consideration is that if the Scheinbergs buy back PokerStars and if PokerStars withdraws from the US, the company will no longer have to be so careful about the “grey markets” it operates in. Under the current owners, the possibility exists that PokerStars will have to withdraw from the Canadian, German and Russian markets in the near future. Under private ownership, that scenario is unlikely to occur.

How much of the above speculation actually comes true, only time will tell. But there will be many players reading this article who will be using their “one time” today – as will the author.

 

One Response to “Rumour: Scheinberg´s to Buy Back PokerStars”

  1. MeleaB says:

    Scheinberg’s or Scheinbergs?