Shared Liquidity for Online Poker

The big news right now for online poker is the signing of a deal to share liquidity across a number of European countries which were formally ring-fenced. Many feel that this is the beginning of a softer stance on online poker and that, done correctly, regulation can create a better environment for players.

 

ARJEL Starts the Party

ARJEL the Autorité de régulation des jeux en ligne - Regulatory authority for online games – has opened the door for other countries to join a deal that has seen France, Spain, Portugal, and Italy combine their player pools. This looks to create something which may be the end of ring-fencing as a tool by governments to over-control online gambling.

At the end of June the announcement came that finally governments were prepared to discuss the ending of the practice, and beginning with the four aforementioned countries a new region, with potential to expand, would almost certainly be created. And now it has come into reality. But is it a good thing, and, more importantly, will it work in the intended way?

To recap, let’s look over a bit of history about how this all came to be, and why.

Around ten years ago, governments around the world began to tighten the noose with several countries either out-right banning the online game or making it law that their citizens would only be able to play against players from the same country. France, Spain, and Italy have long had to put up with these conditions, with Portugal deciding to follow suit in 2015.

When it became clear just how much of a turnover poker operators were dealing with it also became too tempting for governments not to keep everything “in-house” and take all the tax for themselves. There was little thought given to what the risks were to shutting out foreign players. The Spanish and Italian websites showed traffic figures which looked to be fatal from a business point of view, but nobody cared. The men in charge looked happy to just make sure they got their percentage until it all died.

Portugal looked to have games which were beyond repair, until the news came in that the player pool was about to get bigger.

And so here we are. We find ourselves at a crossroads where this can either work or something bad will happen. Is this a false dawn for European real money online poker?

Firstly, we should accept that there has been six years of decline, and that will be tremendously hard to stop. Secondly, most of the diehards that are committed to the game have already fled to friendlier shores: this creates a huge problem if we have dreams of the player pool regenerating.

It is also worth revisiting what effect offshore- unregulated operators have on the market. Just because the rule of law dictates a ring-fenced market, don’t believe for one second that shifty grey area websites aren’t active. It is estimated that at least 50% of players from these four countries are playing on unregulated servers. As already mentioned, this whole exercise is down to tax income, and those in charge wanting as much as they can get away with taking. This has led to convoluted tax regulations laid on the sites with wildly varying rake structures, including French servers using a weird tax per hand system.

 

Too Little Too Late

Nobody ever talks about the make-up of today’s poker community.

Since 2003 when numbers were rising month on month, new poker players were arriving in such amounts that it was impossible for the game to be under any kind of pressure; there was plenty of love to go around. What people appear to have missed is that following Black Friday and dwindling numbers ever since the make-up is arguably made up of the same players who have been around for years. Even when numbers rise, how many of these are old hands returning after a year or two out?

So, what about the new players? It doesn’t take much investigation to see just what the rise of esports has been like over the past two years. This is where a lot of today’s potential poker players have gone. It’s a heart-breaking thought to think that we’ve truly seen the best years of it all, but without a boom from India or China, if we want to see a prosperous future for the game there is much work to be done.

Not everybody is downbeat though. Eric Hollreiser, Communications Director for Amaya, told Lee Davy from CalvinAyre

“This is great news for poker players in these markets, who have been advocating for increased liquidity. As a poker operator licensed in each of the jurisdictions, we know that this will enhance the experience for all players, will maintain consumer protections across geographic boundaries and will potentially increase the combined market size as a result of a more attractive player experience and through increased industry competition. It’s a good day for European poker.”

Marco Melai, formerly of 888 Poker France, is concerned that the average skill level of France, compared to the other three nations, will lead to a situation where it becomes all-out warfare between the four player pools resulting in at least some being decimated.

“The average French player has a much higher level of play than that of the Italian player, under three main aspects: aggressiveness, technique and spending ability. (Habit to higher buy in and proper bankroll). Spain in my opinion is on average the poorest of the “big” three.”

And so, we await news of any rake changes and what the loyalty schemes will look like. This will in all likelihood be the number one determining factor in whether or not players will go straight and leave the unregulated sites for the new landscape. If the rake is high and bonus structure poor then why on Earth would they even think about it?

Maybe the nice men at the tax office will resolve to keep an eye on the health of their new cash cow. Surely they are bright enough to refrain from killing the golden goose?