The potential merger of an English bookmaker with a Canadian online poker company may have a lot to do with online gaming in the U.S., one gaming analyst says.
William Hill PLC, an English-based bookmaker that operates online around the world and manages brick-and-mortar sports books in the U.K. and Nevada, and Amaya Inc., a Canadian-based online poker and gaming company that owns PokerStars and other online poker properties, released a joint statement Saturday confirming that they are discussing a merger.
In the statement, the companies said Amaya has been reviewing its strategic alternatives since February and William Hill has been evaluating options to diversify.
Chris Jones, director of equity research for Buckingham Research Group, a New York-based stock research and brokerage company, said both statements are true.
Amaya, he said, has been looking for a buyer for some time, especially since securities regulators in Quebec began investigating it earlier this year.
”And,” he said, “William Hill has been spending a fair amount of time looking to diversify its business globally … so Amaya makes sense.”
However, preparing for a major regulatory change in the U.S. may be a more important, if unstated, goal of the deal, he said.
“Most importantly, it would be in a very dominating position if U.S. market becomes legal from an online perspective,” Jones said. “This is more about positioning than anything else. From that perspective, the long-term opportunity is to be in the best position if or when online gaming becomes legal here.”
Online gaming will be legalized, Jones said, just not right away.
“I would say it’s not a matter of if, it’s a matter of when,” Jones said. “For sure, (Las Vegas Sands Corp. CEO) Sheldon Adelson is not too enamored of online gaming, and during an election it’s an impossibility. No politician is willing to take it up as a platform.”
However, Jones said, if the economy cycles downward again, the move toward legalizing online gambling could become more palatable.
“You typically see better opportunities for betting in more dour economies,” he said. “You could hear arguments like, 'So, we either have to raise taxes or we legalize online gaming.' Not that I’m hoping for a downward trend in the economy.
“Through PokerStars, Amaya owns the online poker business. And (if it’s legalized), they would be able to get into the U.S. market with that too.”