Gambling on… Gambling?

Online gambling is one of the fastest expanding internet business sectors, and it’s held back only by the legal situation in certain territories. Now a Jewish businessman from Montreal has bet big on a change to the USA’s online gaming laws.

At just 33 years old, Israeli-born David Baazov is the CEO of Amaya Gaming Group, which recently took the audacious step of spending nearly $5bn (US) on huge international gambling sites PokerStars and Full Tilt Poker.

Raised Eyebrows

 

Internationally, the sites are hugely successful, but Baazov’s move has raised eyebrows in some quarters as it seems to rely on a future change in the US’s online gaming laws. Furthermore, Amaya’s gamble has been facilitated in part by the taking on of some huge debts.

Right now, it’s not just US law that Amaya and Baazov have to deal with. American banks and credit card firms refuse to get involved with the financial side of online gambling, though it’s quite possible that this is due to the legal situation rather than any moral standpoint.

Legal Situation

 

In fact the legal situation in the USA is somewhat hazy, and Baazov’s gamble may not be as dangerous as it seems at first glance. The main barrier in the US is that financial transactions pertaining to online gambling are banned, rather than gambling itself. That means that players inside the USA often have trouble getting onto sites even outside the country, including Canadian casinos like GamingClub.com.

Furthermore, the domino effect, where certain states’ legalization of online poker starts to topple the entire ban, has begun already. New Jersey has already fallen, and the fact that the British entrepreneur Richard Branson now has a stake in the Garden State’s activities may spur American site owners to further pressurize their government for liberalization.

Tax Receipts

 

It’s also worth noting that New Jersey’s tax coffers have swollen since the law was changed. Other state governments will be watching with interest. Nevada and Delaware are already ahead of the curve, having changed their laws in 2013 and 2012 respectively.

David Baazov and Amaya are also banking on the fact that the USA is not the be-all and end-all of internet poker, whether further states succumb to its charms or not. Baazov said recently: “From a broader perspective I think that poker is going to grow regardless of the U.S. The game of poker is going to grow not just domestically but internationally.” Amaya stock is up since Baazov’s bold move, so he may be holding better cards than many people think.

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