Inside Asian Gaming

April 2016 inside asian gaming 45 Online gambling king charged with insider trading The securities regulator of Quebec said it was filing insider trading charges against the CEO of the online gaming giant Amaya, David Baazov. He is accused of influencing Amaya’s stock price and aiding trades ahead of its June 2014 takeover of the world’s largest online poker website, Pokerstars. Baazov, who is also Amaya’s largest individual shareholder, denied the charges and the company board said it was backing him. Suspicions were aroused when hundreds of investors bet heavily on Amaya’s stock ahead of its US$4.9 billion takeover of Pokerstars. At the time it was a minor online gambling company, struggling with losses, debts and a slumping stock price. Yet in spite of this its shares more than doubled in price ahead of the acquisition, which was paid for in stocks and cash. Pokerstars had two years earlier bought its main competitor Full Tilt Poker. Through its subsequent takeover, Amaya became the biggest online gambling company in the world. The regulator, Autorite des marches financiers (AMF), said it was alerted by two whistleblowers before it raided Amaya’s offices in December 2014. Along with Baazov, it has also charged Amaya manager Benjamin Ahdoot and a Toronto business associate Yoel Altman with insider trading and improper influencing of a stock price. The AMF also announced it had executed search warrants and obtained cease trade orders against 13 other individuals connected to mergers and acquisitions involving Amaya. Pokerstars, which is based in the Isle of Man, recently managed to launch in New Jersey, a state where online gambling is regulated. The operator had been trying to re-enter the US since 2011, when federal prosecutors shut down its operations there, alleging it was violating federal bank fraud and money laundering laws. E-gaming bets surge past soccer The online bookmakers Bwin said that in the first 66 days of this year the bets it took on which team will win the 2016 League of Legends World Championship were more than those placed on the outcome of this year’s UEFA Champions’ League. On current trends it is predicting the volume of gambling on the e-gaming tournament will surpass the football tournament’s total by 60%. Bwin is anAustrian-basedoperatorwithover 20million customers in 25 core markets. Last June it started offering bets on e-gaming contests and since then turnover has exploded, with two-thirds of the total since then taken in the last two months alone. Tournaments in INTERNATIONAL BRIEFS League of Legends, which is a multiplayer online fantasy battle game, have been the most popular object of e-gaming wagers, making up 69% of Bwin’s total. Second are tournaments in the shoot-em-up game Counter Strike, which get about 10% of all the bookmaker’s e-gaming bets, followed by the games Dota and Starcraft. E-gaming has surged in popularity over the past decade. Thousands of tournaments are now staged worldwide each year, with final contests filling the world’s largest stadia to capacity. Professional e-gamers earn seven-figure salaries and are granted athlete visas to enter some countries. Some universities even award e-gaming scholarships. League of Legends is currently the world’s most popular e-game, with more than 27 million people playing it daily. The second defenestration of Steve Wynn? Steve Wynn’s control of Wynn Resorts is under threat because of new legal action taken by his ex-wife. In a filing in Nevada state court, Elaine Wynn is accusing him of “reckless, risk-taking behavior” that could harm the company and subject it to legal challenges. Ms Wynn owns 9.8% of the company, while Mr Wynn owns 11.8%. An agreement signed at the time of their 2010 divorce gives him voting control over her shares and stops her from selling them. Last year he won shareholder approval to have her kicked off the company board. If the court agrees with her allegations of corporate misgovernance and she gains the right to sell her shares, it could leave Steve as Wynn Resorts’ third largest shareholder behind two institutional investors, effectively ending his control. The combined 21.6% Steve Wynn now effectively controls enables him to hold positions of both CEO and Chairman and to run the business as he sees fit. In addition to two casino resorts in Las Vegas and Wynn Macau, Wynn Resorts’ biggest ever project, the US$4.1 billion Wynn Palace in Cotai, is scheduled to open in June this year. A further project under planning in the US, the US$1.7 billion Wynn Boston Harbor, has made shareholders anxious given competition from proliferating gaming halls in America’s northeast. The Wynns and Japanese pachinko king Kazuo Okada founded Wynn Resorts in 2000. Their combined ownership of 35.6% of voting shares in the company gave them unassailable control. But in 2012 after a falling out, Wynn Resorts forcibly bought out Okada’s 19.7% stake at about 30% less than the market price, in exchange for a commitment to pay him US$1.9 billion after ten years. If Wynn is ousted it will be a replay of 2000, when he was forced out of the company he founded in 1973, Mirage Resorts, following a hostile takeover by MGM.