After last week’s stunning news that the Autorité des marchés financiers (AMF) charged Amaya CEO David Baazov with insider trading, the situation at PokerStars has never been more uncertain since Black Friday.
And things got a little more uncertain on Tuesday, when Amaya, citing Baazov’s potential takeover bid as well as the AMF charges, announced its CEO would be taking a voluntary leave of absence for an indefinite period of time.
Rafi Ashkenazi, who is the current CEO of Rational Group (the operating arm of Amaya, which includes PokerStars) will fill in as CEO of Amaya during Baazov’s absence, while David Gadhia will serve as interim chairman.
The announcement reads in part:
“… Chairman and Chief Executive Officer, David Baazov, is taking an indefinite paid leave of absence from the company, effective yesterday. Mr. Baazov is taking this leave voluntarily to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec. Mr. Baazov will remain a member of Amaya’s board of directors.”
The full statement has been included at the end of this article.
Don’t expect answers anytime soon
With the investigation ongoing, and likely to continue for many months without a resolution, this story is simply not going to go away anytime soon.
Making matters worse for Amaya, because of the ill-will it has sown within the high-stakes poker community, you can certainly expect the general opinion of Baazov and the company to be negative and accusatory (giving Baazov and Amaya the benefit of the doubt is simply not an option within this community), and speculation to be rampant throughout.
Charges could lead to a prolonged period of uncertainty
You can also toss this new development on top of what is an ever-growing pile of news coming out of Amaya this year. In fact, the AMF charges and this new development of Baazov’s leave has brought about even more uncertainty on a number of fronts:
- What does this mean for PokerStars’ recently procured, but still temporary, online gaming license in New Jersey?
- What does this do to California’s chances to pass an online poker bill in 2016?
- What happens to the proposed takeover bid ostensibly being put together by Baazov?
- How does this news impact the reputation of the company going forward, not only with the online poker community who have been extremely critical of the changes Amaya has implemented at PokerStars, but with state lawmakers and regulators in Pennsylvania or New York?
- What impact does Baazov’s leave have on the implementation of other policies the company has planned?
The sooner the questions are answered the better, but you shouldn’t hold your breath waiting for such answers.
Full statement from Amaya
March 29, 2016, Montreal – Amaya Inc. (NASDAQ: AYA; TSX: AYA) today announced that Chairman and Chief Executive Officer, David Baazov, is taking an indefinite paid leave of absence from the company, effective yesterday. Mr. Baazov is taking this leave voluntarily to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec. Mr. Baazov will remain a member of Amaya’s board of directors.
The Board has appointed Divyesh (Dave) Gadhia as Interim Chairman, and Rafi Ashkenazi as Interim CEO. Mr. Gadhia has been an Amaya director since 2010, is the Board’s Lead Independent Director and is Chair of the Special Committee of independent directors established on February 1, 2016 to consider any proposal that may be made by Mr. Baazov, as well as other alternatives that may become available to Amaya. Previously, Mr. Gadhia served as the Chief Executive Officer and Executive Vice Chairman of Gateway Casinos & Entertainment Limited from 1992 until 2010, where he was responsible for strategic initiatives, regulatory matters and governmental relations.
Mr. Ashkenazi is currently CEO of the Rational Group, Amaya’s operating business, which includes the PokerStars and Full Tilt brands. Prior to becoming CEO of Rational Group in late-2015, Mr. Ashkenazi, an experienced gaming industry executive, served as Senior Vice President of Strategy for Amaya during 2015 and as Chief Operating Officer of Rational Group from January 2013 until early 2015, responsible for all customer-facing product and back-office functions for PokerStars and Full Tilt, including marketing, customer support, poker room management, IT management, payment processing and security, and game integrity. Prior to joining the Rational Group, Mr. Ashkenazi was Chief Operating Officer of Playtech, a global gaming software company.