Interview: David Baazov, CEO, Amaya Gaming
Amaya's growth is not one that can be matched by many others in gaming. James Bennett meets its elusive and manically busy founder to discuss "unwanted assets", integration, humility and confidence.
His tag as arguably the one person most people in the industry would like to meet is fitting for David Baazov, founder, majority shareholder and chief executive of Canadian software supplier Amaya. The only problem with that, though, is he’s never free and almost impossible to track down. I got him on a phone call to his office in Montreal. After, that is, being left on hold for 23 minutes.
“I’m going to make the effort to travel less”¦ as of 2014,” he says, adding that 2013 will be a “pivotal year” for the business and he spent the large part of last year on a plane bound for meetings with customers, suppliers and, more often than not, companies he was looking to acquire. Baazov founded (in 2004), owns and in 2010 IPO’d one of the industry’s fastest growing software suppliers on the Toronto stock exchange, all while still in his thirties. And he’s still a way off becoming 40.
The last two years have been the turning point, seeing the company grow from a medium-sized enterprise with a handful of staff to one which now employs more than 800 personnel, has 150 customers, and with fourth quarter revenues projected to be between $CA36 and $40m. This will include some, but not a full quarter of contributions from its Ongame and Cadilliac Jack acquisitions.
Acquisitions galore
The spree began in July 2011 when the firm identified Cryptologic and Chartwell, two fellow Canadian gaming suppliers, as potential targets, taking a 5% stake in the former and bidding to entirely acquire the latter. Crypto’s huge library of casino content and Chartwell’s casino games and platform expertise and technology were too good for Baazov to turn down, so much so that he then took the decision six months later to buy Toronto listed developer Cryptologic for $34.5m.
The next two came almost simultaneously in September last year, with Baazov swiftly jumping into US supplier Shuffle Master’s shoes in bidding for bwin.party-owned poker network Ongame, as well parting with $167m, its largest sum for a business to date, for US land-based slot manufacturer Cadilliac Jack.
Some corners of the industry have described the majority of these newly acquired assets as “unwanted” due largely perhaps to Chartwell and Crypto’s legacy systems and with one (Ongame) described as “surplus to requirements” by its now former co-CEO Jim Ryan.
Baazov’s response, however, is short and swift. “In the case of each acquisition, we were not a sole bidder, so I don’t know how unwanted they are, plus they were very wanted by us.”
His vision for Amaya following the quartet of contracts: “To leverage our technology in order to enable our customers to acquire independent players of any medium of acquisition, whether it be through physical, virtual or mobile channels; and the strategy is for us to execute on that and enable those customers to increase the yield generated from players to further drive the revenue base.”
Simple. Or so you he would have us believe, but judging from Amaya’s competition in the form of rivals such as Playtech, Microgaming and SPIELO G2, for example, it is likely to take the former dot.com consumer electronics and PC salesman and his burgeoning business some time to achieve in one of the most competitive online markets.
Asked how the company is perceived and arguably “misunderstood”, Baazov describes its position as a “challenger”, categorising Amaya’s ability to grow as a business under two principles: “humility and confidence”.
“Amaya is, without a doubt, from a regulatory perspective the most logical choice. When I talk about humility and confidence, it is the approach we take with our customers that matters most to us; where it’s not just about what the terms are and that’s it. We’re more about a working relationship and we want to enable our customers to do as well as possible because the more money they make the more money we make,” he adds.
He assures eGR both Chartwell and Cryptologic are both “fully restructured and integrated” with Ongame and Cadilliac Jack not far behind. However, there is an enormous amount of work, particularly on the personnel side, to be done. As bwin and Party Gaming have discovered in the last 18 months to two years, integrating two, let alone four businesses into a larger umbrella business is not an easy task.
Physical, virtual and mobile
Baazov’s philosophy at Amaya has always centred on what he describes as the convergence of technology from three areas in gaming; the physical, virtual and mobile, with everything it does based on consumer acquisition.
“If you go back two decades, the best medium for acquisition of a consumer was physical; someone who led the consumer to the purchase of products whether it was in a store or a kiosk,” he explains.
“In the last decade it went online, allowing companies such as eBay or Amazon to rival retail behemoths like Walmart. Then we felt that in this decade the best medium was mobile.
“We wanted to develop technology that allowed operators to acquire customers independent of the medium. It doesn’t matter how you acquire a consumer. Once you acquire them we’re enabling you to use technology to generate the highest yield from that consumer that you can cross-sell to any number of verticals whether it’s physical, virtual or mobile. That’s been our vision from day one,” he adds.
Cadilliac Jack was the “last” piece of the puzzle, with the CEO admitting he is not, at least for the time being, in the market to acquire any other companies. He calls the casino video reel slot and bingo games designer and manufacturer the “last real hole” in which to fulfil his vision.
Add this to its existing technology and platform expertise and its two online B2B casino firms and a poker network, plus its venture into mobile announced in February last year, and Amaya will be able to offer almost a full suite of physical, virtual and mobile products to any form of new or existing clients or licensees, be they land-based, online, mobile, and perhaps soon social.
“We’re seeing customers on an interactive basis that are not existing Cadillac Jack or Amaya customers. Similar to how our technology is providing operators with an independent medium for consumer acquisition, we’re seeing that benefit where in some cases the door opens for Amaya via the interactive channel and not just the physical and visa versa,” says Baazov.
The main beneficiary of this model could well be Ongame’s existing licensees, which will inevitably be offered the chance to expand their product portfolio by taking Amaya’s new and existing casino and mobile content. Amaya will have to be on its toes, with the poker network market experiencing huge change with Microgaming and Playtech readjusting rake and value models and network ecology as well as benefiting from the demise of Entraction/IGT Poker, which closed its doors on 11 December last year. But Baazov is confident that poker can still achieve great results for Amaya.
“A big detriment to Ongame’s ability to add new licensees was that [when owned by bwin.party] you were joining a network owned by your largest competitor in Europe. The market will see that the amount of investment we’re making in poker will spill over to the entire market in Europe and start bringing back some of the major licensees,” he says.
“We will add to the network. Poker in Europe has become a lot tougher but we’re confident we’re going to be able to acquire customers and offer not just traditional poker but different mediums of poker and changing it a bit. You don’t want to be a follower so we’re looking to lead that initiative.
“We are able to offer more than 75 existing interactive licensees ready access to Ongame’s poker network, and a lot of these licensees have land-based licences in the UK and Belgium, for example. We’re in discussions with them so they could benefit from our on and offline offerings including our recent acquisition of Cadillac Jack.”
Baazov says that this form of adding new business could, and will more than likely, be replicated and “get significant traction” in the US following on from its deal with Connecticut-based Mohegan Sun, the second largest casino in the US.
Amaya, via its Ongame technology, will initially provide the Mohegan Tribal Gaming Authority-run casino with a freeplay poker offering through the mohegansun.com domain and complement this with mobile and tablet versions. This will be done from the available options on Bally’s iGaming Platform with Ongame signing up as one of the software supplier’s partners earlier last year.
Humility and confidence
Despite running a large multinational and leading arguably one of the busiest lives in the business, a number of people who know Baazov tell me he is first and foremost a family man with three children, one of whom is just a few months old, and someone who “leaves his ego at the door”. Asked what kind of leader and manager he is, he admits a strong family has kept him grounded, level-headed and humble.
“I don’t believe in patting yourself on the back. What’s enabled me to stay level-headed is having a family. It’s important to stay grounded. Somebody once told me, “humility can build you a castle and pride can destroy that castle’. This is something I believe in wholeheartedly and I think I have a lot of humility.
“Amaya as a firm is not David Baazov,” he concludes. “There’s no one person that can take credit for it, not 10 people, it’s a whole company of people that should take credit for it. I am but one person. As a manager I believe that if you believe in the person you have hired, then you have to believe in their capability and not micro manage.
“2013 is going to be a hectic year for us. We’re adding more talent and top executives.”
Amaya’s growth is not one that can be matched by many others and the remainder of this year will continue to add to one of the most intriguing stories in gaming.
(Photo courtesy of Riccardo Cellere)
This article originally featured in January’s edition of eGaming Review. For subscription options, click here.