Toronto: the new home of iGaming stocks?
05 May, 2015
As a major operator in the iGaming industry since it first came about approximately 10 years ago, Canada has been the subject of many headlines in recent months, in particular, Canada-based iGaming operators.
Certainly, alarm bells were raised in December 2014 when Amaya Gaming Group came under the investigation of the Authorité des Marchés Financiers (AMF), a financial securities watchdog, which was looking into its fluctuating share prices from around the time of its acquisition of PokerStars.
Toronto-based Amaya Gaming claimed it was not the basis of its inquiry, and refused to comment further. Interestingly, despite being acquired in a $4.5 billion deal, PokerStars chose to overlook Canada's prominent position in the iGaming industry and stayed committed to its Isle of Man location.
It is particularly interesting that staff at PokerStars made this decision, especially considering how many iGaming companies are based in Canada, and more specifically, Toronto. According to NYX Gaming Group Executive, the Toronto Stock Exchange has been "historically a willing home for companies operating in volatile sectors such as mining and hence require investors with a meaningful risk appetite."
No investor knows this better than Intertain, who have been listed on the TSX since February 2014. Amaya Gaming rose to prominence after purchasing CryptoLogic and Chartwell, (two big players who dominated the online gaming stocks boom in Toronto at the turn of the century) and subsequently sold their assets to Intertain, which they used as a springboard to float on the TSX.
Since then, the company has made even more headlines in 2015, particularly when it bought out the assets of London-headquartered Gamesys in February. In a deal worth £425.8 million, Intertain had soon acquired some of Gamesys' biggest brands, including Jackpotjoy, known as Britain's favourite online bingo brand, and other slots and gaming brands such as Spanish-based Botemania.
The journey did not come without its bumps in the road however; Intertain was not exempt from the same investigations by the AMF, but thankfully their shares bounced back when they announced that they had acquired a Scandinavian-based online casino operation, Vera&John.
Certainly, Toronto has proven to be something of a pot of gold for many iGaming operators in recent years. Unlike its neighbouring United States, laws around regulated online gambling are far more lenient in Canada, allowing online casino providers to run without having to base their operations overseas (akin to many European operators, who may for example run their businesses from Malta or Gibraltar.)
It's a particularly interesting subject at the moment with talks of the Restoration of the Wire Act set to change the face of online gambling in the United States, but if the success of the aforementioned companies is anything to go by, the States would be advised to listen.
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