Amaya's Share Price Drops 32% On 2015 Profit Warning

Amaya Gaming, owner of the world’s biggest online poker room, PokerStars, announced its third quarter financial results at a conference call on Tuesday. News that the Canadian company’s third-quarter results were behind estimates, and that its full-year revenues would come in at around CA$1.446 billion to CA$1.564 billion in 2015, 11% to 14% lower than initially predicted, subsequently sent shares into a tailspin, with prices eventually falling by a huge 33.4% by the end of the day’s trading.
Explaining part of the dramatic drop in business was a strengthened dollar, which according to Amaya resulted in an “approximate 19% decline in the purchasing power of our customer base”. Also contributing to the decline was a delayed launch of “significant aspects” of its new sportbook as it seeks to “enhance the consumer product experience and complete the product offering,” and as Global Betting and Gaming Consultants chief executive, Warwick Bartlett, explains:
“The combination of lower earnings in prospect plus the delayed launch of the sportsbook, has clearly not rested well with the financial community”.
According to Amaya, the company currently commands a 71% of the total global online poker market, with PokerStars accounting for 68% of that figure, and Full Tilt the remaining 3%. While Amaya says it had a total of around 97 million registered customers at the end of Q3, a 9% improvement over the same period of time in 2014, only 2.2 million of these players actually gambled using real-money during the quarter ending September 30th, a 3% drop from a year earlier. Furthermore, 94% of these players are only active on PokerStars.
Finally, on a more positive note, Amaya recently received approval from the New Jersey Division of Gaming Enforcement to launch its PokerStars and Full Tilt brands in the state, an application process which eventually cost the company around $2 million. The much-anticipated launch is expected sometime in the first half of 2016, and according to analysts could provide just the catalyst needed for a US online poker revival.