Amaya stock hits low after Kentucky court issues $870M judgement

TORONTO -- Amaya Inc. stock hit a new 52-week low Thursday after a Kentucky court issued a US$870-million verdict against the company for losses at its PokerStars online gambling website.

See Full Article

The Montreal-based gaming company (TSX:AYA) said it will appeal the judgment, which it described as being based on an arcane law dating back more than 200 years and completely disproportionate to the alleged offence.

Kentucky had filed a suit against Amaya to recover alleged losses by state residents who played the real-money options on PokerStars between 2006 and a crackdown in 2011 that effectively ended most online poker in the United States.

Amaya bought PokerStars in 2014 in a US$4.9-billion deal. The company said that regardless of the final award in the Kentucky case it would seek recovery against the former owners if compelled to pay.

Canaccord Genuity analyst Kevin Wright said the purchase included US$300 million put in escrow by the previous owners to deal with the case, which had been filed before the agreement was made.

The company also said that the ruling seems to contravene the same court's previous ruling that damages should be based on the net losses of players. The company claims those losses totalled roughly US$18 million, subtracting winnings, bonuses and free play that the players won.

The company's stock hit a 52-week low of $16.51 in early morning trading after the news broke, before recovering to $17.50, down 98 cents or 5.3 per cent at the close.

Amaya's stock peaked about $37 earlier this year before losing a quarter of their value in early November after the company said the strong American dollar was hurting the purchasing power of its customers.

In its statement Thursday, Amaya also took issue with the fact that the state of Kentucky, rather than the individual PokerStars players, was the lead plaintiff in the case.

"This is a frivolous and egregious misuse of an antiquated state statute to enrich the contingent-fee plaintiff's attorneys hired by the Commonwealth and not the people of Kentucky," said Amaya lawyer Marlon Goldstein.

"Given that PokerStars only generated gross revenues of approximately US$18 million from Kentucky customers during the five years at issue, a damages award in excess of US$800 million is notable only for its absurdity."

Amaya's online gambling brands include PokerStars, Full Tilt and StarsDraft, and the company has licences to offer its games in more than a dozen countries across Europe as well as Quebec and New Jersey.



Advertisements

Latest Economic News

  • Cleanup of oil spill in Sask. cost $107M, Husky Energy says

    Economic CTV News
    CALGARY -- Husky Energy says efforts to clean up a major oil pipeline spill last year in Saskatchewan have cost $107 million. About 90,000 litres of heavy crude and diluent leaked into the North Saskatchewan River last July, jeopardizing drinking water supplies for thousands of people downstream. Source
  • Ottawa's deficit hits $14B through first nine months of fiscal year

    Economic CBC News
    The federal government ran a budgetary shortfall of $14 billion over the first nine months of the fiscal year, compared with a $3.2-billion surplus over the same period a year earlier. The Finance Department's monthly fiscal monitor says federal program expenses between April and December rose $16.7 billion, or 8.8 per cent, compared with the same stretch a year ago. Source
  • Uniqlo's new modest line featuring hijabs debuts in Toronto

    Economic CTV News
    A modest-style clothing collection that features hijabs and abayas is making its debut at Canada’s two Uniqlo clothing stores. The clothing collection is by U.K.-born fashion designer Hana Tajima and features 30 items in 81 colours and patterns. Source
  • Waymo accuses Uber of self-driving car theft

    Economic CBC News
    A self-driving car company founded by Google is colliding with ride-haling service Uber in a court battle revolving around allegations of betrayal, high-tech espionage and greed. The brewing showdown emerged late Thursday in a lawsuit filed in a San Francisco federal court by Waymo, a once-secretive self-driving company hatched by Google eight years ago. Source
  • Ottawa's deficit hits $14 billion nine months into 2016-17 fiscal year

    Economic CTV News
    OTTAWA -- The federal government ran a budgetary shortfall of $14 billion over the first nine months of the fiscal year, compared with a $3.2-billion surplus over the same period a year earlier. The Finance Department's monthly fiscal monitor says federal program expenses between April and December rose $16.7 billion, or 8.8 per cent, compared with the same stretch a year ago. Source
  • Auto parts giant Magna raises concerns about protectionist trade measures

    Economic CTV News
    AURORA, Ont. - Canadian auto parts giant Magna International Inc. (TSX:MG) raised concerns Friday about protectionist trade measures as it reported its latest quarterly results. The Aurora, Ont.-based company says the auto industry is dependent on open borders and the free movement of goods, services, people and capital, particularly in Europe and North America. Source
  • OMERS retirement fund improves investment return in 2016 to 10.3 per cent

    Economic CTV News
    TORONTO -- The OMERS pension fund for nearly half a million public sector workers in Ontario says it achieved a 10.3 per cent net investment return in 2016 -- the highest in several years. The Toronto-based fund manager says its net assets rose by $8.1 billion to $85.2 billion at the end of 2016, making OMERS one of Canada's largest retirement funds. Source
  • 20% higher gas prices push up cost of living to 2.1% pace in January

    Economic CBC News
    The cost of living in Canada rose by 2.1 per cent in the year up to January, a sharp increase from the pace in December. Statistics Canada reported Friday that the annual inflation rate rose to 2.1 per cent last month, from 1.5 per cent. Source
  • Inflation rate in January fuelled by gas prices

    Economic CTV News
    OTTAWA -- A surge in gasoline prices helped push Canada's annual inflation rate well beyond expectations in January to 2.1 per cent -- an increase that coincided with the implementation of new carbon-pricing policies in Ontario and Alberta. Source
  • London takes title of world's most innovative city

    Economic CTV News
    A new ranking has named London the world's most innovative city, after analyzing cities on their potential for creation and implementation of new ideas. In the 10th edition of Melbourne-based outfit 2thinknow's "Innovation Cities Index 2016-2017," the British capital outperformed 500 cities on the list for the second year in a row. Source