Gambling industry blog CalvinAyre recently reported that info brought to light by the so-called "Panama Papers" leak could possibly connect Amaya Gaming (AYA) CEO, David Baazov, to dealings with illicit offshore companies. The piece has already been used as a source by other industry blogs, who have regurgitated the original claim in articles of their own. A poster on financial site Seeking Alpha took it even further, linking to the original article and claiming that the Amaya CEO "Pops up in Panama Papers." Those claims, however, are false, and appear wildly exaggerated in an attempt to create scandal by dragging Baazov into the mix.
To begin, the Panama Papers, originally acquired by the International Consortium of Investigative Journalists (ICIJ), have not been made available to the public, and have only been shared with select news publications across the globe. So where did CalvinAyre get its info from? The blog appears to have based its report on info gleaned from a previous leak, also obtained by the ICIJ, and made available on its Offshore Leaks Database website.
On the site, the group provides a tool with which users can see networks and relationships "among people or companies and offshore entities." That data contains info from entities incorporated in 10 offshore jurisdictions, and only goes up until the year 2010, some four years before Amaya purchased gaming giant PokerStars.
Using the database, CalvinAyre made connections between David Baazov's sister, Goulissa, brother Ofer (aka Josh) and a Montréal based company named Zhapa Holdings Inc. Also linked was Isam Mansour, a Zapha shareholder who has been charged with insider trading offenses related to the PokerStars transaction.
The article also claims Josh Baazov and partner Craig Levitt, both charged in the insider-trading case, had once owned online sportsbook BetonUSA and were rumored to be involved with another site which CalvinAyre described as a "notorious slow/no pay sportsbook." However, they provide no evidence to support these claims and fail to explain why they are relevant.
Of course, establishing an offshore company, such as Zhapa, is not a criminal act; there are a variety of legitimate reasons why a person or business would want to establish such an entity. But it's not known what purpose Zapha served, or if it was even used at all. What's more, David Baazov has not been connected to the holding company whatsoever, and does not appear in the ICIJ database.
While headlines involving David and potential criminal acts may be eye-catching, it's important to study the facts. The temptation for blog sites to connect the buzz words "Baazov" and "Panama Papers" was probably just too much to resist, but it is key for investors and the public to read more than just the headlines when articles like this are published.
Disclosure: I am/we are long AYA.