Amaya loses $3.47m in “immense” Q3 but promise of New Jersey bounty awaits

amaya-gaming-david-baazovCanadian gambling operator Amaya Gaming Group saw revenue rise 120% in the three months ending Sept. 30, but the lingering hangover from the company’s 2012 acquisition spree resulted in a net loss of $3.47m for the quarter. Revenue rose to $40.2m thanks to a surge in Latin American gaming machine sales via Amaya’s Cadillac Jack subsidiary, which Amaya acquired last November. The 2012 acquisitions of software developers Cryptologic and the Ongame online poker network are also cited as helping boost Amaya’s year-to-date revenue to $115.5m, a 194% bump over the same period last year.

But the added bulk also boosted Amaya’s Q3 expenses by 148% to $40.3m, while year-to-date expenses are up 179% to $130.2m. The company’s preparations to enter the US online gambling market and a steep bump in income taxes also weighed heavily on the company’s ledgers. Total losses for the first nine months of 2013 were $22.3m, over three times the $6.4m of red ink Amaya recorded in the same period last year. Adjusted earnings were $14.6m in Q3, representing 36% of total revenue, versus $6m (33%) in Q3 2012.

The third quarter was an eventful one for Amaya, including the aforementioned Cadillac Jack deal to place 2,000 gaming units in Mexico over the next 12 to 24 months and Amaya’s deal to supply casino gaming content to Caesars Interactive Entertainment’s online operations in New Jersey. The fourth quarter is shaping up to be equally active, with Amaya’s inking of a New Jersey online casino content deal with, an online poker deal with Betfair’s New Jersey-facing site and an online poker and casino deal with Atlantic City’s Golden Nugget Hotel & Casino. The company also added $70m via the sale of subsidiary WagerLogic to GoldStar Acquisition Co.

Amaya CEO David Baazov described the third quarter as “immense” for both his company and its partners. Baazov characterized the launch of full-fledged online gambling in New Jersey as a “once in a lifetime opportunity” for which Amaya has positioned itself to become a market leader. “Our footprint and partnerships with leading gaming operators and brands also presents us with the opportunity to grow quickly in the US as regulation evolves in other states.”