Amaya Q2 poker revenues predicted to fall

Amaya poker revenues are projected to have fallen further in Q2 with a 9% year-on-year drop, according to new research from gaming analysts Eilers & Krejcik.

The projection is worse than Wall Street’s expectations which are reportedly for “flat-to-slightly down” poker revenues for Amaya, which operates the PokerStars and Full Tilt brands.

By contrast, Eilers & Krejcik estimated cash game revenues were down 10%, Multi Table Tournament revenues down 7.5% and Sit & Go revenues down 22%.

Cash game traffic, via pokerscout, struggled even more than revenue figures, falling 17% in the second quarter.

The Eilers report said: “Online poker traffic trends fared even worse in ring-fenced markets (e.g. France, Spain and Italy). Weak cash game traffic has been a consistent multi-year trend and we do not foresee any changes, especially in light of the recent VIP program overhaul.”

Amaya recently downgraded its PokerStars’ VIP Club loyalty program and capped rakeback at 30%, down from 70% in 2015.

Eilers said its projection model had been “fairly accurate” since it began tracking in Q3 2015, although it noted there was 6% variance to the upside in Q1 2016 between its estimate and actual reported results.

Amaya is expected to issue its Q2 results on 8 August, although the company has not yet made an official announcement.

Back in Q1, Amaya reported an 11% fall in poker revenue, but a 252% rise in online casino and sports betting revenues, with interim CEO Rafi Ashkenazi suggesting the latter verticals would be the strategic focus going forward.

Eilers admitted it had not found a reliable method to track online casino or online sports betting activity, but projected flat quarter-on-quarter revenues of $55m for online casino and 50% quarter-on-quarter growth for sportsbook to $7.5m.

The report added: “We are still mostly optimistic about the online casino opportunity and note Amaya continues to add new content.

“Meanwhile, we remain negative on the outlook for Amaya’s sports betting product based on conversations with industry insiders who indicate this product is not up to par with the competition.”

A separate report from gaming analyst Howard Jay Klein issued a sell signal on Amaya, pointing out that average seven-day traffic on PokerStars ring games had plunged to a nine-year low. Since January 2016, cash game liquidity has declined 32%.

Klein added: “The company’s Spin ‘n Go feature, basically a lottery prize added randomly to pots as the game progresses, has damaged liquidity badly, according to our sources in the online gaming community.”

EGR recently revealed Amaya was cutting dozens of jobs in its London office in an effort to cut costs.

Amaya did not immediately respond to a request for comment.