Forbes Magazine has long been considered a leader among industrial news sources, especially where companies and their CEO’s valued at 10+ figures are concerned. Thus the December publication that named David Baazov, Chief Executive Officer of Canadian-based Amaya Gaming Group, ‘The King of Online Gambling’ was quick to draw attention.
The proclamation of Baazov’s virtual title was further embellished by the fact that the young executive is a mere 34 years of age. Despite his relevant youth, though, the founder of Amaya Gaming was clever and business savvy enough to pull off the most shocking acquisition in the history of internet commerce. Baazov personally spearheaded the buyout of the world’s largest online poker operator, Rational Group, parent company of PokerStars and Full Tilt, for $4.9 billion.
Staff journalist Nathan Vardi of Forbes.com described Baazov in a way that can only be decently phrased as having an enormous pair of titanium testicles. He wrote how Baazov, founder of a little-known gaming software company with nominal assets valued at $7 per share, traipsed into the Blackstone Group’s Manhattan offices asking them to do the unimaginable. He requested they invest $18 per share in Amaya Gaming to help raise the $4.9 Billion needed to present an offer for Rational Group to the Scheinberg family.
As one might expect, Baazov’s meeting was promptly ended as members of the Blackstone Group laughed him out of the building. But he refused to let go of his big idea. Having secured numerous (albeit much smaller) acquisitions in the past, the CEO of Amaya Gaming was doggedly determined to make it work.
Over the next few months, Baazov held clandestine meetings with Rational Group’s owners, the Scheinberg’s, raking over the details of a potential buyout. Wall Street big wigs got involved in investment talks and disinclined bankers began to reconsider. By mid-summer, news of a probable buy-out hit the media waves, and Blackstone had realized the error of its ways.
In August, the acquisition of PokerStars and Full Tilt was finalized. Baazov had secured $1 billion from Blackstone; the largest commitment the investment group had ever put into a single deal. The CEO had sold off $1.7 billion in Amaya shares for $18 apiece, converting to $21 by the time it was over. Thanks to the generous engineering of his commitments with Blackstone, the investment group received its lofty shares for approximately $15 each.
“With that one transaction Baazov is now the new king of online gambling,” Vardi wrote. The procurement of Rational Group sky-rocketed Baazov’s Montreal offices into the world’s largest publicly traded online gambling company. The CEO’s brazen tactics succeeded in catapulting Amaya’s net worth 2,600% since the initial launch in 2010.
“The game of poker itself is like negotiating a transaction,” Baazov said in an interview with Forbes. “This was a really, really big-stakes game.”
Of course, it’s only been a few months since Amaya Gaming took the reins of PokerStars and Full Tilt; listed respectively as the 1st and 4th most trafficked online poker rooms in the world by PokerScout. Both websites are currently garnering as many, if not a little more, than the same number of cash game players as before the purchase took place. But after dishing out $4.9 billion to become the King of Online Gambling, it will be some time before Baazov’s phenomenal investment turns a genuine profit.