The head of Italy´s online gambling regulation agency has said that significant progress has been made towards pan-European liquidity for online poker.
Over the past six months there has been various indicators that pan-European online poker liquidity is getting closer to reality. In October last year, France passed the “Digital Republic Bill” that allowed regulators to enter into talks to share liquidity and, in November, regulators from France, Italy, Spain, Portugal, and the UK announced that shared liquidity agreements could be in place by mid-2017.
Earlier this month, the European Union approved a technical standards paper that would allow Portugal to enter online poker shared liquidity agreements with other European regulated markets, and now the head of Italy´s online gambling regulation agency – Daria Petralia – has told Italian news outlet Gioconews that Europe should be ready to adopt a shared liquidity plan by the end of July.
Plenty of Obstacles Still to Overcome
The movement towards pan-European poker liquidity follows six years of successive declines. Many online poker players in the ring-fenced countries of France, Spain, Italy and Portugal have abandoned their regulated markets to play at offshore poker sites – not only due to a lack of liquidity, but also because of lower value tournaments, reduced rewards and high levels of rake.
Taxation will be the major stumbling block for pan-European online poker liquidity as each of the ring-fenced countries has its own taxation system. Although there is not a great deal of difference between the tax structures used in Spain, Italy and Portugal, operators in France are taxed on every hand dealt. A change in the French rake and tax structures will be necessary before any proposals are successful.
There is also an issue about who would want to operate in a pan-European player pool. PokerStars is the only online poker site with a presence in the five countries (including the UK) that might participate in a liquidity sharing agreement. Although it has been rumoured that Winamax has been recruiting Spanish and Portuguese speakers, 888Poker only operates in Spain, Party Poker has a very minor presence in France, Spain and Italy, and only two iPoker skins operate in more than one ring-fenced country.
The possible involvement of the UK also raises questions about what might happen following the country´s departure from the European Union in 2019. Will the UK join a pan-European market in 2017, only to leave again two years later? How will the UK´s participation in a ring-fenced market affect the traffic on networks with large numbers of RoW players? Will Gibraltar-licensed poker sites still be able to operate in Europe in the post-Brexit era?
Will Pan-European Poker Liquidity be Better for Players?
There will be a handful of benefits for players in a ring-fenced pan-European market, but not a lot. With PokerStars likely to dominate the new marketplace, the site may be able to provide more valuable tournaments than its current €25,000 Monthly Special and there might be some action for players who prefer the less popular games of Stud Poker and Omaha Hi/Lo.
The likelihood is that Party Poker will remain uncompetitive and the existing iPoker skins will not bother applying for operating licenses in jurisdictions where they do not already have a presence. These sites tend to rely on their online casino and sports betting operations for their incomes, and only offer online poker as a courtesy. Recent figures suggest online poker is a loss-leader for all operators in Europe´s ring-fenced market with the exception of French market-leader Winamax and PokerStars.
Even if Winamax or 888Poker expands throughout Europe and challenges the dominancy of PokerStars, there is only a limited number of players that will want to play in a “slightly bigger than before” ring-fenced market. Unless something drastic is done to improve player rewards and reduce rake, pan-European poker liquidity is not going to tempt players away from offshore poker sites hosting million dollar tournaments and more rewarding VIP programs.