Amaya Online Gambling Still Growing Despite Losses

Published Saturday, August 31, 2013 -
Amaya Online Gambling Still Growing Despite Losses

Montreal Canada based Amaya Gaming Group has seen its revenue stream grow at a great rate after expanding its empire for the past few years. While those with experience know you must spend money in order to make money there is usually a time where the spending can outpace the earnings.

Such is the case for Amaya Gaming. The firm reported revenue of $37.2m in the three months ending June 30,2013 posing a 157% increase over the same period last year. Adjusted earnings were up nearly five-fold to $10.1m as margins increased to 27% from 14%. But the company’s net loss for the quarter rose 320% to $11.44m primarily due to the costs of its acquisition spending.

In 2010 the company filed an IPO and then took most of 2011 making technology deals with government operated gaming corporations in jurisdictions such as Kenya, Moldova and the Dominican Republic.

Amaya`s quest for a more diversified company started in 2012 by acquiring suppliers for online products such as Cadillac Jack and software developer Cryptologic. The company also purchased the Ongame Poker Network from digital entertainment raising some concerns the firm didn`t have enough cash on hand to secure the player liabilities totaling $15.7m, when the business had just $4.9m in ‘cash and cash equivalents’ on hand.

The cost of the acquisitions has created a loss but is not subsiding with the CEO of the firm David Baazov announcing it had penned a deal to acquire Los Angeles-based lottery and gaming product designer Diamond Game Enterprises for $25m. Baazov said Diamond Game’s technology would “increase our lottery footprint in North America while anticipated to be accretive to adjusted EBITDA.” As part of the arrangement Amaya Gaming Group agreed to provide Diamond Game with credit facilities worth $2.5m to fulfill its existing contracts until the acquisition is complete.

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