Market Overview

Will Amaya's New Deal Further Open The Door For Legal Online Poker In The U.S.?

It's not necessarily a winning hand, but the online poker industry was dealt some good cards recently.

Last week, the owners of PokerStars and Full Tilt Poker agreed to be purchased by Canada's Amaya Gaming Group (OTC: AMYGF) for $4.9 billion.

The deal between privately-held Olford Group and Amaya will reportedly turn Amaya into the world's largest publicly-traded online gaming company. Olford is the parent company of Rational Group, the owner and operator of PokerStars and Full Tilt Poker.

U.S. federal law prohibits websites from taking sports bets over the internet or for banks to handle online gambling transactions. The Justice Department in 2011 cracked down on the flourishing online poker industry – indicting PokerStars, Full Tilt Poker, another online poker company and several company executives with bank fraud, money laundering and illegal gambling offenses.

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Later that year, however, the Department of Justice reversed itself and held that states were free to sanction online gambling. At the moment, online poker is legal in three states – New Jersey, Nevada and Delaware.

Other states are already looking hard at legislation legalizing online poker. According to the i-gaming industry website 4Flush.com, "California and Pennsylvania seem to be the closest, with both states still optimistically [eyeing] something in 2014, while several other states have also started the process of drafting up their own poker laws, including Massachusetts, New York, Mississippi, and Illinois.”

Online, or “i-gambling” advocates believe the U.S. is the next big market for the industry.

"We think what's happening in the U.S. is the single most exciting happening in I-gaming in the world," Eamonn Toland, president of the North American division of the Irish-based Paddy Power online betting firm, told the Associated Press last month.

AP also quotes a prediction by Morgan Stanley – that, by 2020, legal online gambling in the U.S. will generate around $8 billion annually.

The New York Times reports that Amaya believes its deal will help bring the PokerStars and Full Tilt brands back “to regulated markets where it already operates, including the United States,” although the company hasn't yet outlined its U.S. agenda.

Posted-In: 4Flush.com Department of Justice Full Tilt Poker online gambling online gamingTopics Tech General Best of Benzinga

 

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