Amaya targeting scale over technology in sportsbook acquisition hunt
PokerStars-parent company expects to have significant free cash flow for M&A in H2
Amaya is looking to acquire a vast user base and accompanying revenues for its sportsbook rather than technology, the company’s CEO Rafi Ashkenazi said Friday.
Ashkenazi suggested the firm’s BetStars product had improved enough under new manager Zeno Ossko that it simply needed more scale to accelerate its growth.
“It’s not about technology, it’s more about customer base and it’s more about revenues. That’s the way that we are regarding sports,” Ashkenazi said during the firm’s Q1 earnings call.
Sportsbook revenues totalled just under $7m in Q1, with 227,000 customers placing a bet.
Ashkenazi suggested back in March that Amaya could be looking to make another run at William Hill, with the hiring of former Hills executive Robin Chhabra only further fuelling speculation.
However, any M&A action is likely to take place in the second half of the year, when Chhabra joins the firm to lead its M&A push, and the company finishes paying off the Scheinbergs from the PokerStars purchase in 2014.
“From July onwards we are going to generate far more free cash flow that would allow us to invest back into the business,” Ashkenazi said.
“We will be able to at least review tactical or strategic opportunities. If it could be a tactical opportunity, specifically around the sportsbook, then I am hoping we would be able to use some of the free cash flow that we had acquired.”
Ashkenazi also suggested cash would be invested into supporting organic growth for the sportsbook, with a new mobile app on the way, improvements to in-play, on-boarding and localisation, and major marketing investment.
“We should be ready with a product that we feel far more comfortable to market for the beginning of the football season, so around August,” Ashkenazi said.
“If I am just looking at marketing, today our marketing budget is approximately 13% of our NGR. If you look at other operators in our industry, everyone is at more than 20%, 22%, 24%, so we still have a lot of room to grow here,” the exec added.