Canadian gaming operator Amaya Gaming Group says it’s considering selling its land-based gaming device division Cadillac Jack. The brick-and-mortar casino supplier had been a significant contributor to Amaya’s revenue growth since Cadillac Jack became part of the Amaya family two years ago. But the company now says it has initiated a strategic review for the B2B land-based business “with the fundamental objective of expediting Cadillac Jack’s growth strategy and maximizing value for Amaya’s shareholders.”
Amaya CEO David Baazov said Cadillac Jack has “matured greatly as a company under Amaya’s ownership,” pointing to the firm’s recent notching of 1,100 unit orders in Atlantic City, Louisiana and Wisconsin. But with the gaming device market in full-on consolidation mode, Baazov appears skeptical on the future potential of a small standalone player like Cadillac Jack.
It probably doesn’t help that Amaya splashed out $4.9b to acquire PokerStars and Full Tilt earlier this year, rendering its land-based operations something of an afterthought in the revised Amaya pantheon. Stars and Tilt generated profits of $218.4m in the first six months of 2014, about $50m more than Amaya paid to acquire Cadillac Jack in 2012. Amaya may also wish to realize some quick coin in order to keep smiles on the faces of the hedge fund bosses who put up the majority of the sum Amaya borrowed to purchase its new online assets.
Amaya is currently awaiting word on if/when New Jersey regulators will allow it to enter the state’s regulated online gambling market. On Oct. 4, Amaya officially filed its petition with the Division of Gaming Enforcement (DGE) for a transactional waiver to conduct online gambling operations. In 2013, Stars’ former owners inked a prospective online gambling tie-up with Atlantic City’s Resorts Casino Hotel. The DGE has yet to offer any timeline on when it might announce its decision regarding Amaya’s petition but Amaya’s recent decision to curtail Stars’ operations in a couple dozen ‘grey’ and/or black markets appears intended to burnish the site’s newfound reputation as a respecter of all things regulatory.