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What happened to David Baazov, the disgraced ‘Poker King’?

Gerard Palmer by Gerard Palmer
July 14, 2022
in Community
King of Poker

In true rags-to-riches style, David Baazov rose from nothing, conquered the online gambling market, and ultimately ended up in hot legal waters after an investigation by the Quebec stock market watchdog. In the latest news surrounding this interesting saga, Baazov sued L’Autorité des Marchés Financiers (AMF), a major Canadian securities regulator, for abusive and malicious actions against him.

Starting the climb: selling discount coupons to computer resales

Born in Israel, Baazov’s parents moved to Montreal when he was one year old. As a math whiz, the young Baazov got bored with school and informed his parents at the age of 16 that he was dropping out. This resulted in him being kicked out of the house.

At first, he stayed with a friend, but it was not a lasting option. The youngster soon found himself on the street and sleeping on Montreal park benches. He survived like this for two weeks before using his brother’s driver’s licence to rent an apartment.

Later, Baazov patched up relations with his parents and started selling packages of discount coupons for dry cleaning and clothing outfits. This gave him a sales-oriented base and he went on to launch a computer-reselling enterprise. It was a slow start in a small office, with only two people visiting his establishment in the first five months.

However, the business not only picked up but also positively boomed when he landed a contract to sell computers to the Montreal Public Library. Over the next five years, Baazov built a $20m computer-reselling empire. When the direct computer sales model surfaced, and after losing a bid against Compaq, he sold this company at age 25.

First gambling exploits

After moving his focus away from hardware, Baazov approached software developers in 2005 and designed an electronic poker table that could be sold to cruise ships and land-based casinos. This was the birth of his company Amaya.

This enterprise went public with a revenue of $6m in 2010 on the Toronto Venture Exchange. It raised close to $5m with its IPO. Another breakthrough for the company was when General Wesley Clark, a proponent of gambling-generated tax revenue and US presidential candidate, joined the Amaya board.

With these business wins in his pocket, Baazov set his sights on the online gambling market. He started acquiring smaller casino software developers such as Chartwell Technology and Cryptologic, before buying Ongame, a designated online poker software company.

Growing the company

After these smaller conquests, Baazov targeted some of the bigger guns in the industry and bought Cadillac Jack, a slot machine designer and manufacturer, for $177m. Backed by his standing relationship with the Blackstone GSO credit division, Amaya’s stock price rose from $3.50 to $7 between 2012 and 2013.

Baazov did not rest on his laurels after these successes. Optimistically, he eyed Rational Group, the secret and private owner of PokerStars. The owner of this elite, online poker giant experienced some legal troubles at the time because it continued to run online gambling services after the US Congress banned it. PokerStars ended up paying a $731m settlement.

The PokerStars acquisition demanded intense negotiations and complex funding from investors such as Black Rock. It also took years to finalize. Amaya bought Rational Group for a mind-blowing $4.1bn, a mere two days before Baazov turned 34 years old. The penny-stock public company was now a multi-billion-dollar online gaming mecca.

Fall from grace

Unfortunately, these victories were short-lived. In June 2014, the AMF initiated an investigation into Amaya’s acquisitions of PokerStars and Full Tilt Poker. These deals turned Amaya into the biggest online gambling company worldwide.

After raiding Amaya’s offices in December 2014, the securities regulator charged the company with irregular trading practices, which included having privileged information and influencing Amaya’s stock price. In short, Amaya and its esteemed CEO were accused of insider trading.

Baazov strongly denied these charges and highlighted his belief in ethical business practices when approached about the charges. However, in March 2016, the Amaya CEO took an indefinite leave of absence after the AMF charged him with five counts of insider trading. The state regulator froze Baazov’s accounts and assets along with 13 other associated individuals, which included Baazov’s brother.

This indefinite leave of absence became permanent in August 2016. Baazov entered a legal battle that concluded approximately two years later on June 28, 2018. Baazov and the 13 co-accused parties were acquitted in light of the AMF’s repeated errors. Baazov later brought civil charges against this regulator for $2m, citing that its tactics were abusive and malicious during its investigation. 

David Baazov today

Baazov offered to buy Amaya for approximately $3.48bn. Reports indicate that he intended to take the company private. However, the insider trader charges interrupted this deal.

At the end of 2016, all talks were off the table to buy this Canadian online gambling company. Baazov said that this was due to some shareholders demanding a higher premium. Amaya’s shares climbed when talks were still on the table, but fell after the deal reached a dead end. If the deal had succeeded, it would value at approximately $6.7bn, including debt and transaction costs.

The last word was that Baazov would seek new funding for the portion of the offer he was financing. In March 2017, the Amaya founder and once CEO sold approximately two-thirds of his remaining company shares for roughly $267.7m.

Here, the trail runs cold. Fans and non-fans alike are waiting to see what happens with the $2m lawsuit against the AMF and where Baazov’s fortunes will lead him next. What is certain is that online gambling has come a long way and is here to stay despite vigorous opposition in some countries such as the US.

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Gerard Palmer

Gerard Palmer

I'm a content writer, author and blogger with years of experience in writing, researching and editing content. I've written for various websites on topics that include business, technology, education and more. I also enjoy blogging about my thoughts on life as well as the latest happenings around the world. Currently living in the US, but I enjoy exploring new places while traveling solo or sometimes with my partner. Books are one of my favorite things to do while on holiday because it gives me an excuse not to talk!

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