Regulators in Portugal Say Não to Online Poker Networks

PortugalThe fiasco of online poker regulation in Portugal took another twist last week when regulators said that there were no plans to issue licenses to networks.

It would be no understatement to say that online poker in Portugal is a mess. Plans to license online poker sites and regulate the industry have been floated around for almost two years – during most of which time providing a service to online poker players in Portugal has been illegal. As a result of the mess, the majority of online poker sites have left the country – as have many of the top volume players – leaving a void that has been filled by offshore sites.

Although legislation has now been passed to regulate online poker in Portugal, the forecast for when the first online poker licenses will be issued have been pushed back every quarter since last September. The current forecast is for sites providing online sports betting opportunities to be licensed by the start of Euro 2016 in June. However, industry observers have their doubts that this deadline will be met following the latest twist to the legislative saga.

High Taxes. No Shared Liquidity. Now, No Networks

There are three contentious issues affecting the licensing of online gambling sites – and online poker sites in particular. Taxes, Liquidity and Networks. The issue of taxes (up to 30% on Gross Gaming Revenues) is going to have a major impact on the profitability of licensed operators in Portugal. It has been estimated that cash game rake will have to be set at 6% or 6.5% to make participation in the Portuguese regulated market viable. There would also likely be a reduction in player rewards.

Last December, we reported the news that Portuguese regulators were going to ring-fence the online poker market similar to France, Italy and Spain. There has at least been some movement on that front, with a representative of the county´s regulatory body – the Servico de Regulacao e Inspecao de Jogos (SRIJ) – informing a player´s delegation that discussions were taking place about shared liquidity with all three of the ring-fenced countries, plus UK regulators.

However, nobody is sure whether the decision not to allow poker networks to operate in Portugal is a deliberate one or another act of incompetence by Portuguese regulators. The news broke when the SRIJ announced that the online gambling licenses it was planning to issue were Business-to-Consumer only. Without Business-to-Business licenses, it would be impossible for many smaller sites to return to the Portuguese market, and even creates a doubt over the participation of PokerStars.

Is PokerStars/Full Tilt Now a Network?

Earlier this month, players from Full Tilt Poker were moved onto the PokerStars platform. The PR from Amaya Gaming referred to the combining of the two player pools as a “dual poker-brand-strategy” and it is certainly the case that players from the two sites are sharing one platform for the benefit of increased liquidity. From a regulator´s point of view, the case could be argued that PokerStars and Full Tilt are operating a network in all but name.

Of course, PokerStars could provide an online poker service to Portugal as a stand-alone entity in much the same way as it does in France, Italy and Spain. But what if the Portuguese regulator then announced it was entering into a shared liquidity agreement with the UK, or any other jurisdiction in which Full Tilt still operates? That would mean that PokerStars players in Portugal would be sharing liquidity with players from another site through the PokerStars platform. In other words, a network!

The same argument applies to 888Poker (who share liquidity with WSOP.co.uk and Loto$Poker.com) and Party Poker (thanks to their relationship with Bwin). Under the “Não Networks” rule, the iPoker and MPN Networks would not be allowed to provide a service – effectively leaving the current state monopoly, the Santa Casa de Misericordia de Lisboa, as the only operator in the regulated Portuguese online poker market.

Maybe that is what the plan was all along!