Jul 21, 2017
PokerStars Focusing on Booming India Online Poker Market
By RTR Dennis
India is experiencing a surge in poker popularity. They’re also the world’s largest growing smartphone market with 1.2 billion mobile phones. This combines to make India a potential goldmine for online poker operators.
PokerStars would love to capture a huge piece of this market. And they’re focusing a lot of effort into the country with over 1.3 billion people. Let’s discuss more on these efforts along with how they’ll help Stars further their business.
Aiming for Half the Market
PokerStars’ parent company, Amaya Gaming (soon to be “The Stars Group”), isn’t shy about floating their goal for India’s poker market.
According to Amaya CEO Rafi Ashkenazi, they want to control at least half the iPoker play here. And they estimate that the market will eventually be worth $150 million.
“It’s a booming country,” Ashkenazi told the Financial Post. “We want to be there in time and we want to make sure that we are, as usual, the market leader when it comes to poker.”
Confusing Poker Landscape
Much like the United States, India lacks legal clarity on internet poker and other forms of online gaming. Some Indian states have legalized the activity, labeling it a “game of skill.” Others have yet to act on the matter, leaving online poker illegal or, at best, in a grey area.
It appears that PokerStars wants to stay on the legal side of things. And Ashkenazi is currently in India to finalize the details with a local partner. Once the deal is finalized, PokerStars will have access to all of India “except a couple of states.”
All-around Benefits for Amaya
Amaya figures to benefit from more than just internet poker when they enter India. The country’s online gaming market as a whole is expected to hit $1 billion in revenue by 2021. Over 190 million of these gamers will be playing on mobile devices, which is one area that Amaya will heavily focus on.
Over the past couple of years, the company has been diversifying their products to offer casino games, daily fantasy sports, sports betting, and lottery-style poker games.
These efforts have paid off, with Amaya shares climbing 22 percent in 2017. And this has helped Ashkenazi accomplish his goal of paying down the company’s debt. The hope is that the move into India will result in even more growth, and fewer debts.
Moving Past Previous Struggles
The past two years have been tough on Amaya. 2016 saw their former CEO and founder, David Baazov, hit with insider trading allegations. He took a temporary leave of absence, which turned into a permanent leave. Baazov eventually sold all his shares in the company, and he continues battling the insider trading case.
This year has been a struggle because Australia began enforcing the Interactive Gambling Amendment of 2016. Australia was a big market for PokerStars and other companies. But now they’re forced to vacate the Land Down Under like many other companies.
Australia has grown tired of their country’s gambling problem. And banning offshore iGaming operators is seen as one step towards helping curb their dilemma.
Of course, this will cut into Amaya’s bottom line. But India could be a big help in reclaiming some of this lost revenue. The same can be said of the US, which we’ll cover next.
PokerStars Lobbying for More Online Poker in US
PokerStars earned a New Jersey iGaming license in 2015, which gives them a solid foothold in America. But the problem is that Stars still has a long ways to go when making inlets in other parts of the US.
Only Delaware, Nevada, and New Jersey have regulated online gaming – just 3% of the US population. And given that Delaware and Nevada have passed on licensing PokerStars, this further limits their scope. But Stars has been busy lobbying every potential state they can so they’re prepared when US online poker grows.
The next states that are most likely to regulate iPoker include California, Florida, Illinois, Michigan, New York, and Pennsylvania.
It’s unclear whether any of these places will also label PokerStars as a “bad actor” for violating the Unlawful Internet Gambling Enforcement Act (UIGEA) under their old ownership. But they’re putting themselves in a good position for when/if these states regulated online gaming.
And this is a big deal when considering that the US online poker market alone is estimated to be worth $2 billion. Casino games increase this value to over $20 billion.
Combination of India and US will Accelerate PokerStars’ Growth
The days of the worldwide iGaming market being one giant grey area are long gone. This means that companies like Amaya must now be more patient as they wait for online gaming regulation to open up in different parts of the world. But Amaya appears to have this patience, along with the drive to push for legalization when needed.
Their efforts in India and the US should help the company grow quite a bit over the next 5-10 years. And this will help them further move past their CEO debacle and having to exit Australia.