David Baazov has formally resigned as CEO and chairman of PokerStars’ parent Amaya Inc. The news is the latest blip in what has been a painfully long unfolding for the man once hailed as the wunderkind of the online poker world.
Baazov, who co-founded Amaya in 2004 and grew it into one of the world’s biggest online gambling giants, took indefinite leave from the company in March amid accusations by Quebec’s financial regulator of insider trading.
At the time the allegations were levied at him last spring, Baazov he was preparing a bid to take the company private. That proposal appears to still be “under review,” among other offers, according to Amaya’s current management.
Acting CEO Rafi Ashkenazi, along with interim Chairman Divyesh Gadhia, will both take over their respective roles permanently. Baazov still owns approximately 18.5 percent of the company.
“I am proud of my contributions in building Amaya into the successful company it is today, and continue to be supportive of its strategy and management,” said Baazov in a statement issued late last week.
In March, the Quebec financial regulator Autorité des marchés financiers (AMF) announced that Baazov would face five charges of leaking privileged information and attempting to influence the price of Amaya’s securities.
Initially, it was thought the charges related only to the suspicious upsurge in the company’s stock in the weeks prior to the announcement of Amaya’s $4.9 billion leveraged acquisition of PokerStars. But AMF documents show the scope of the investigation was actually much wider.
The regulator paints a picture of an alleged network of information sharing between Baazov and his associates and immediate family members that related to other mergers and acquisitions spanning a period of five years. Baazov has denied all charges and accusations.
VIP Changes “Working”
On Friday, new CEO Rafi Ashkenazi led a conference call delivering Amaya’s Q2 results. The company reported that overall revenues had increased 10 percent, to CAD$286 million, in comparison with the same period in 2015. Net earnings for the first half of the year, meanwhile, were up 163 percent to CAD$78m in the same period.
Amaya attributed its growth to strong performances in casino and sports book, but declared itself to be pleased with poker, which was flat year-over-year. Poker remained steady despite factors that could have adversely effected it, said the company, such as continued global currency exchange headwinds that affected deposits, and cannibalization by its sports book, especially during the Euro 2016 soccer championships.
Ashkenazi attributed poker’s resilience to changes made to the poker loyalty program that had proved so unpopular with high-stakes, high-volume regs that it caused player sit-outs at the beginning of the year.
“The changes to our poker loyalty program on PokerStars are having the intended effect on our poker ecosystem as we reduce incentives for high volume players and enhance the experience for new and recreational players,” the new official CEO said in a press release.