Regulators from Europe´s four ring-fenced online poker markets are expected to sign an agreement this week paving the way for a merged player pool.
Back in April, we reported there were “[geolink href=”https://www.pokernewsreport.com/signs-of-momentum-towards-pan-european-poker-liquidity-21654″]signs of momentum towards Pan-European poker liquidity[/geolink]” and wrote that there could be some sort of agreement in place by mid-2017. If a press release issued last week by French regulator ARJEL is accurate, it looks as if our predictions were correct.
According to the press release, regulators from France, Italy, Spain and Portugal have agreed a “basis of cooperation” with regard to a shared online poker market, and will sign an official agreement this coming week in Rome.
What the agreement consists of exactly is not yet known, but apparently it will start a process that will ultimately allow players from the four ring-fenced online poker markets to compete against each other in a slightly-bigger-than-before ring-fenced pool.
PokerStars Likely to Dominate New Market
The possibility of the EU´s ring-fenced online poker markets merging next year is good news for PokerStars. The world´s largest online poker site is the only company to have a presence in all four ring-fenced countries, and only one of two companies currently operating in the EU believed to be making a profit from online poker (the other being French market leader Winamax).
It is unlikely that 888Poker, PartyPoker or any iPoker skins will extend their online poker operations – preferring instead to focus on their money-making online casinos and sportsbooks – leaving Winamax to be the only serious competitor to PokerStars in the new merged market. The three networks combined attract around the same number of cash game players as Winamax, who are expected to extend their operations into Italy and Spain.
Merge Unlikely to Have Little Impact on Overall Player Numbers
Although PokerStars and Winamax will see their market shares increase, the new merged market will be unlikely to have little impact on overall player numbers. Since 2011 – when France, Italy and Spain first segregated their markets – player numbers in the three countries have shrunk to less than a third of what they were prior to regulation. The Portuguese market has shrunk to less than a third of what it was post-regulation in the past six months.
Many players from the segregated markets have moved to countries where they can continue playing on .com poker sites, started playing on unregulated poker sites, or given up playing online poker altogether. As the new merged market is not going to produce a player pool the size of a .com poker site, be able to provide the level of rewards and promotions offered by unregulated sites, or offer anything new to players who have left the game, very little is going to change.
A Step in the Right Direction but Too Little, Too Late
Some industry observers have heralded the agreement as “great news”. Sadly, for players still playing in segregated markets, it is “news”, but it is not “great news”. Although it is a step in the right direction, the agreement is too little, too late to reverse the decline in regulated online poker in France, Italy, Spain and Portugal. Players are not going to return to play in jurisdictions where they pay higher rake and receive fewer rewards, and in which their profits are taxed at anything up to 30%.
If the four separate regulators manage to agree on a common structure, the new four-state merged market could be in place within twelve months. Players can expect to see a bump in cash game traffic and the value of online poker tournaments while the novelty exists, but unless something is done to reduce rake and increase player rewards to industry-standard levels, the news will continue to be dominated by further declines in player numbers.