Reaction: Full Tilt migration to PokerStars a “logical move”

Industry reacts to Amaya’s decision to merge Full Tilt onto the PokerStars platform and speculates what the firm will do with the tech post migration 

Amaya’s decision to merge Full Tilt onto the PokerStars platform has been dubbed a smart move by industry insiders. The firm said the migration will boost liquidity, streamline development and improve the overall player experience. In reality, however, Full Tilt had become a rock around PokerStars’ neck and the operator had to find a way to cut it loose. [private]

The downfall of Full Tilt – its profitability had been on the decline since 2012 – could be seen as another sign of weakness at Amaya. Amaya’s share price took a hammering after the firm slashed its full-year guidance at the end of Q3 and tumbled even lower after it was slapped with an $870m fine in Kentucky. Others, however, believe the operator is astutely reacting to the failing health of the global online poker market by going ahead with the migration.

“I don’t see it as a sign of any weakness at Amaya, but more as a sign of the weakness of the wider poker market where if you don’t have scale you’re going to struggle to make an impact,” an egaming insider told EGR. “In that regard, focusing on PokerStars makes far more sense than continuing to flog a dead horse as I would imagine Full Tilt is at best slightly profitable with a fairly substantial cost base.”

A logical move

PKR chief exec Chris Welch agrees: “It’s a logical move for the business to reduce their cost base; the Full Tilt brand has lost its shine somewhat, and as a tactical brand it always had a limited shelf life. In the end it was simply too expensive to run two brands and far better to drive a single power brand like PokerStars.”

The migration is set to complete by spring, a move Amaya said would allow its tech and development teams to make improvements and deliver innovations “fast and more efficiently”. For example, the firm said that instead of splitting resources for developing its Sit & Go features independently for each brand, its teams would work together to deliver the best product on a single platform.

It will also help from a marketing perspective, with some suggesting Amaya will simply divert ad spend away from Full Tilt and towards PokerStars.

“I’m not sure they could scale back marketing [Full Tilt] much more,” another industry expert told EGR. “It’s hard to see how you revive Full Tilt without a major marketing campaign and you have to think that money would be better spent on PokerStars both in marketing and new product development.”

What next for the tech?

The big question, though, is what will happen to the Full Tilt platform post-migration. Will Amaya look to raise cash by selling the technology to a rival – the Full Tilt platform is widely considered to be one of the best in the industry. Or will it be mothballed over fears its competitors could gain an advantage by acquiring the asset?

“It probably makes sense to sell it and pay down debt,” says Eyal Ofir, an analyst at Dundee Capital Markets. “Obviously that depends on what it is worth. Maybe they can try and use it as a carrot in the US and sell it to a competitor that doesn’t need the brand but only the tech. There are only a few that are experienced in running these operations,” he adds.

EGR understands that at least one New Jersey operator has plans to acquire its own technology platform as part of its long-term plans for the market, while the Borgata recently put its partnership with bwin.party under review following its takeover by GVC Holdings. But whether they would see the Full Tilt platform as a viable product and acquisition remains to be seen.

Other options include selling the tech to a B2B operator in Europe that lacks a poker solution, although it would be unlikely to command a high price and hence why Amaya may simply kill it. Some, however, believe the firm may look to sell it to someone who can advance their cause in new jurisdictions such as the US and maybe even Russia.