Baazov on Trial: Amaya CEO pleads not guilty to fraud charges and has vowed to contest them vigorously.
David Baazov, Chairman, and CEO of Amaya Inc has pleaded not guilty to five counts of securities fraud, according to the Quebec Regulator, Autorité des marchés financiers (AMF).
The AMF filed penal proceedings against Baazov in March following a 15-month investigation into the suspicious trading of Amaya’s stock in the lead-up to the announcement of its $4.9 billion acquisition of PokerStars and other Oldford Group assets.
Charges against Baazov included ‘aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya Inc, and communicating privileged information.’
AMF spokesman Sylvain Theberge said that Baazov, along with his co-accused, had formally submitted their pleas in writing in the past couple of weeks. The case will now be sent to Quebec court for the setting of trial dates and selection of a judge.
Co-Accused Enter Not Guilty Pleas
Baazov stands accused with two other individuals Amaya, Yoel Altman and Benjamin Ahdoot, and three companies, Diocles Capital Inc., Sababa Consulting Inc. and 2374879 Ontario Inc. All parties have pleaded not guilty, said the AMF.
Ahdoot is Amaya’s VP of government projects and a childhood friend of Baazov’s. Together, they formed a tech company in the nineties which got into trouble for failing to pay copying levies for the audio discs it had sold in contravention of copyright law.
Altman, meanwhile, is a chartered accountant who has been described as a ‘long-time strategic adviser,’ to Baazov.
The AMF recently said that the charges relate to incidents have occurred between 2011 and 2016, which means that at least some of the alleged insider trading and stock manipulation predates the Oldford acquisition significantly.
Baazov Faces Five Years
The regulator also announced that 13 more individuals are suspected of enriching themselves while trading in possession of privileged information, or leaking such information. Many of these individuals include members of Baazov’s close circle of business partners, family and friends.
The defendants face fines of $5,000 to $5 million per charge and up to five years in prison if convicted, Theberge said.
Baazov, who had been preparing a bid to take the company private at the time he was formally charged, announced at the end of March that he would be taking paid leave so he could address the case against him.
‘I believe that stepping down in the short term will help to avoid distraction for the company and its management while I vigorously contest all allegations made against me and pursue my bid to acquire the company,’ he said.
Atlantic City Casinos Post Highest Operating Profits Since 2010, But Bottom Line Remains Dicey
It looked so promising: Atlantic City casinos averaged a 17.2 percent gross operating profit across the city’s eight remaining gambling resorts, the highest number since 2010 and a 29 percent increase over 2014.
But before you go buying stock in any of the New Jersey gaming resort’s gambling operators, be aware that gauging a business’s financial performance according to operating profit alone is a flawed methodology, according to most economists.
Atlantic City casinos posted stronger gains for their operating profits in 2015, but the region remains engulfed in fiscal turmoil. Mayor Don Guardian, at the podium, is at odds with State Senate President Stephen Sweeney, behind to his right, and New Jersey Governor Chris Christie. (Image: Aristide Economopoulos/NJ Advance Media)
That’s because gross operating profit isn’t the net bottom line or income, but rather what’s left of the remaining money after a business carries out its day-to-day responsibilities like payroll, supplies, and marketing. The net per se doesn’t factor in a resort’s overall debt load, local and state income taxes due, or any ongoing expenses.
Though operating profit shouldn’t be solely used in determining whether a business, or in this case region, is turning a corner and approaching better days, it’s still a useful scale in generating economic forecasts.
Any sort of meaningful profit is certainly a welcomed sign of revitalization in an area where revenues have been decidedly dilapidated over the last decade.
The Union Gap
Atlantic City casinos benefit from a rather friendly 9.25 effective tax rate on winnings, but powerful unions are thought to be hampering bottom lines.
‘The thing that hurts Atlantic City from a margin standpoint are the costs, because the unions are pretty powerful,’ Macquarie Securities SVP Equity Analyst Chad Beynon told The Press of Atlantic City.
The New Jersey gambling metropolis has become the target of a hostile war between Atlantic City Mayor Don Guardian (R) and New Jersey Governor Chris Christie (R). The governor and State Senate President Stephen Sweeney (D-District 3) want the state to assume control of the town’s finances, but Guardian and State Assembly Speaker Vincent Prieto (D-District 32) oppose that direction, as it would give Trenton the power to renegotiate union contracts.
‘It’s beyond belief that this thing has gone on this long. . . If you’ve seen what’s going on in Atlantic City, I would say it’s comical but it’s tragic,’ Sweeney told nj.com on Monday. ‘Atlantic City is not willing to help itself.’
On Thursday, Prieto is expected to have the Assembly vote on a measure that would block Christie’s Atlantic City takeover in favor of giving the troubled town two years to clean up its act.
Prieto and Guardian’s ongoing fight against allowing the state to assume control while simultaneously dancing along the lines of bankruptcy could backfire for the speaker.
‘There’s going to be serious consequences if the city goes bankrupt,’ a source told NJ.com.
A City Underwater
Atlantic City is underwater not only fiscally, but also, apparently, literally.
According to a recent report published in National Geographic, the city’s cash-strapped public service utilities, paired with ongoing global warming, could lead to a devastating natural disaster in the coming years.
Though Atlantic City’s boardwalk resorts are on high enough ground, the impoverished surrounding communities are in immediate danger of catastrophic flooding.
Climate Central sea level expert Benjamin Strauss says Atlantic City is a barrier island that has extremely low and flat terrain. Strauss explained that a four-foot water surge would inundate roughly 50 percent of Atlantic City dwellings, while the same surge in Boston would only impact seven percent of residents.
Melting polar ice caps and warmer temperatures are slowly expanding the ocean and its total water mass, effectively growing the threat to coastal communities around the world.
Atlantic City is bracing for a two-front perfect storm of sorts, it seems.
Kentucky Derby 2016: Does Anyone Care After Historic 2015?
Over 18 million people watched live and on television as American Pharoah crossed the finish line at the Kentucky Derby last year, and it appears the historic run has renewed interest in the sport. (Image: sportingnews.com)
The Kentucky Derby opens its gates on Saturday for the 142nd running of America’s most bet-upon horse race. The first leg of the Triple Crown in the US, the Kentucky Derby welcomes more attendees than any other Thoroughbred race in the country and is dubbed ‘The Most Exciting Two Minutes in Sports’ for its short 1.25-mile length distance.
Horseracing remains a popular sport throughout America, but tracks are struggling to keep their doors open, the historic Atlantic City racecourse the latest notable fatality to join East Boston’s Suffolk Downs and California’s Hollywood Park.
The annual race first held in 1875 kicks off the three-leg paramount series, but following American Pharoah’s historic 2015 run, there are warranted concerns over whether populous intrigue will return to Churchill Downs. American Pharoah won last year’s Kentucky Derby, Preakness Stakes, and Belmont Stakes in becoming the first Triple Crown winner in 37 years.
Ticket Prices Rise
The Kentucky Derby and Preakness have historically attracted adequate interest as fans watch to see who will win the first leg and then whether the same horse can continue its Triple Crown hopes in Maryland. When a horse doesn’t win the first two legs, the Belmont Stakes often suffers.
Some analysts theorized that Pharoah’s accomplishments could carry over to the Derby and diminish interest as the Triple Crown had now been experienced in every fan’s lifetime.
Surprisingly, it’s just the opposite as ticket prices are soaring according to SeatGeek.com.
The online ticket marketplace is reporting that resale prices are averaging $571, 2.5 percent higher compared to 2015. Tickets for the upper grandstand will cost you $902 each, a 14 percent premium compared to 12 months ago.
Where’s the Smart Money?
As of Thursday, there are 22 horses entered for Saturday’s marquee race.
Nyquist, a two-year-old undefeated colt is currently the heavy favorite at odds of 3-1. His next closest challenger is Exaggerator (8-1), a three-year-old colt that is coming off a win at the Santa Anita Derby in early May.
Though 22 horses will be lining up, 15 of them have odds of 15-1 or worse. Trainer Todd Pletcher, who has two horses in the race, Destin (15-1) and Outwork (15-1), says Nyquist deserves more respect.
‘Everyone has to be careful to call this a wide-open race,’ the decorated trainer told Daily Racing Form. ‘In fairness to Nyquist, he’s undefeated, taken his show on the road, and won at multiple distances. . . Based on what I’ve seen, he’s still a little underrated.’
Pletcher won the Derby in 2010 and also has two Belmont Stakes victories to his resume.
2015 By the Numbers
More than 170,000 attended the Kentucky Derby last year to witness American Pharoah capture the first leg of his eventual Triple Crown. The race set an all-time record for total money wagered with $137.9 million on the Derby and $194.3 million for the day’s races.
Some 17.9 million television viewers tuned in as Pharoah crossed the finish line according to Nielsen.
It’s a tall task to repeat, but odds are aligning in the Kentucky Derby’s favor.
Detroit Casinos Represent Substantial Chunk of Michigan City’s Overall Revenue
Detroit casinos played an integral role in the revitalization of the formerly bankrupt Michigan city by generating 16 percent of the total local revenue in 2015.
Three Detroit casinos accounted for 16 percent of the city’s total revenue last year, but at what cost? That depends who you ask. (Image: hgbinc.com)
The MGM Grand, MotorCity Casino Hotel, and Greektown Casino-Hotel represented the lion’s share of the state’s $2.8 billion gambling industry last year, with the three casinos responsible for contributing $174.3 million in tax payments to Detroit.
The American Gaming Association (AGA) is on a cross-country 40-state tour to hype how gaming positively impacts state and local jurisdictions. AGA President Geoff Freeman was in Detroit on Wednesday to pinpoint how casino companies are leading the way in turning the city around.
Hosted by the MGM Grand and attended by US Representative Brenda Lawrence (R-Michigan) along with members of the aforementioned casinos, the meeting was an exercise in self-love, with praise and adulation exchanged among the attendees.
‘Detroit’s three casinos have been partners in the community’s campaign to get this great city back on the right track,’ Rep. Lawrence said. ‘We’ve seen their commitment to Detroit . . . The greatest impact can be realized in jobs offered in a wide range of careers providing a path to the middle class for the residents of Detroit, as well as their mission-based philanthropic efforts.’
Not Everyone’s in the Deal
The City of Detroit filed for Chapter 9 bankruptcy on July 18, 2013, citing upwards of $20 billion in debt, the largest municipal bankruptcy filing in the history of the United States by nearly five times.
Michigan appointed Kevyn Orr as emergency manager of the city, and 17 months later, Detroit announced it had emerged from bankruptcy on December 10, 2014. Orr’s goals were fulfilled and he resigned, and Detroit was once again back in the hands of its elected leaders.
While Orr made sure the city was solvent and able to pay its bills, that isn’t the case for a vast demographic of the region’s residents. Many feel that the casinos are providing an economic boost to the city’s government by preying on at-risk, lower socio-economic level locals.
‘People in Detroit are already struggling as it is,’ resident Laura Eggleson told CBS Detroit’s Sandra McNeill this week. ‘I just don’t see how they helped us as a community.’
McNeill’s news radio program takes her throughout the city to gauge opinions on Detroit from the people who know it best. In testing the casino waters, McNeill said the majority seemed to be torn on the issue legal casinos, due to gambling addiction.