Why Shared Online Poker Liquidity in Europe Won´t Work

EuropeWhile many in the poker media have got excited about France, Italy, Spain and Portugal sharing online poker liquidity, not everybody feels as optimistic.

If you get your online poker news from a variety of news sources, you may have noticed a fairly positive reception for the news that regulators in France, Italy, Spain and Portugal have signed a shared liquidity agreement that will merge their four ring-fenced markets into one pan-European online poker market.

Many industry observers (not us) feel that merging the four ring-fenced markets into one will halt their respective declines and herald a new dawn for online poker in Europe. On Twitter, Alex Dreyfus described the shared liquidity agreement as great news … for poker consumers and fans in Europe.

However, not everybody agrees. Although a pan-European online poker market should result in more cash action during peak hours and more valuable tournaments at weekends, concerns have been raised that French players will dominate the new market, resulting in online players from other jurisdictions looking elsewhere for their poker action – if they bother to join the new player pool at all.

French Players will Dominate New Market

The concerns that French players will dominate the new market were raised recently by Marco Melai – the founder of Cardplayer Italia, who has also worked for 888Poker in France and Lottomatica in Italy. Writing as a guest contributor for calvinayre.com, Melai claims that French poker players have always been stronger than their Italian, Spanish and Portuguese counterparts.

He supports his argument with historical data from the World Series of Poker demonstrating that players from France have more bracelets, more earnings and more cashes than those from Italy, Spain and Portugal. Melai notes that players in Italy have had more opportunities to qualify online for WSOP events, making the disparity between successful French and Italian players even more significant.

Adjusting the figures to account for the four countries´ relative populations makes little difference to Melai´s statistics, and he believes that Spanish and Portuguese players will suffer the most in the new shared liquidity market because of their lower disposable incomes. He concludes by stating French players will dominate the new market and drain money from players in the other three countries.

Spanish Players Likely to Play Away from Home

In 2014, a study conducted by the CODERE Foundation and the Carlos III University in Madrid found that 48% of Spanish online poker players chose to play at offshore, unregulated poker sites. The reason for the lack of interest in domestic regulated sites, researchers claimed, was lower bonuses and taxation (Spanish residents pay 30% tax on gambling winnings above €3,000).

We reached out to Spanish online poker player Domingo Cerrado to see if the situation was still the same and whether a pan-European market would attract players back from offshore, unregulated poker sites to play in the new market. His comments imply the efforts being made to merge the four ring-fenced countries are too little, too late and that shared online poker liquidity in Europe won´t work.

The CODERE Foundation research doesn´t tell the whole story. When Spain ring-fenced online poker [in 2012], many Spanish players relocated to the UK to continue playing on .com sites. Maybe they also did in France and Italy, I don´t know. What I do know is that Spanish players in the UK will not return back to Spain to pay more rake, get lower rewards and pay more tax than they do now.

The same applies to players who went to play at offshore sites. These sites have better bonuses, better rewards, better tournaments and more cash action than you get at PokerStars España. Even for recreational players, the opportunities to win big amounts are better at offshore sites and even if the new shared market grows to be the same size [as offshore sites], I think most players will stay where they are and wait and see what happens.

We asked Cerrado if he felt players were taking a chance by trusting their bankrolls with unregulated operators.

I think maybe they are. I have been lucky and always been paid, but I know some players lost money to Full Flush Poker before. However, regulation does not work for players. Look at Europoker (link) and PKR. Where was the player protection then? Some players don´t even know they are playing at offshore sites, so when they see PokerStars España is now PokerStars Europa it will be the same site to them and give them no reason to change.

Player Numbers Could Actually Fall in the New Market

Speculation by some industry observers suggests the combined PokerStars´ player pools from France, Italy, Spain and Portugal would create the second largest online poker network in the world after PokerStars.com/.eu. However, this may not necessarily be the case as the recorded number of players in France and Spain are inflated by loopholes that allow non-residents to play on their regulated sites.

The current situation in France is that any player with an EU-registered bank account can open an account with an online poker operator. PokerStars.fr withdrew this option for non-French players earlier this year, but Winamax.fr continues to allow qualifying players to play at the site. A similar scenario in Spain allows anybody with a Spanish tax number and a verifiable address to play on their regulated sites.

The likely outcome is that the new shared liquidity market will create two market leaders (PokerStars and Winamax) and that each will have a pan-European network about double the size of the largest offshore networks. As was mentioned earlier, this should result in more cash action during peak hours and more valuable tournaments at weekends, but will this be enough to attract players back from offshore sites? Not without a reduction in rake, an increase in player rewards and lower taxation -and especially if whatever money is left goes in the direction of French players.