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Preetam Kaushik

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Online Poker Choking in the Grey Fog of Legislative Uncertainty in Europe

Posted: 21/04/2013 19:45

The European Union happens to be a key market for online poker after America. Germany accounts for the second largest number of online poker players globally, with only the US ahead of them. Black Friday crippled online poker there. But a few years down the line, with the changed stance of DoJ has paved way for US legislature to legalize online poker. Now several US states have already passed legislation legalizing online poker. Across the Atlantic, despite immense popularity for the game, both in its live versions as well as online forms, lack of a unified and sensible legislative framework is actively strangling the growth of online poker industry in many EU member countries.

A checker-board of laws and policies

Across the Eurozone, each member nation has their own policies and laws regarding gambling in general and online poker in particular. The end-result is a crude patchwork of legislative framework that keep changing across borders. And many of the countries are actively antagonistic to or plain unconcerned about the industry. Any economic activity requires a clear and precise legislative framework that protects the interests of all the stakeholders: the companies, the state and the consumers. This is all the more so in the case of gambling and similar games of chance/skill, where historically, industries have flourished under strict legislative control. The current climate in EU shows a total lack of centralised legislation or policy framework, which is actively hampering the growth of the industry. This was amply demonstrated in March 2013 in Brussels, where industry experts, national regulators and representatives from the European Parliament and the European Commission gathered to explore the need for unified regulation of the online poker market.

A case of contrasting fortunes

Despite having one of the largest number of poker enthusiasts playing online, Germany has an actively hostile policy towards online poker. The game became effectively banned in all 16 states in the country in December 2012, when Schleswig Holstein finally joined the other 15 in the State Treaty on Online Gambling. Licenses are only granted for online sports betting in the treaty that was ratified in July 2012. And neighbouring France is a veritable mess when it comes to regulations regarding online poker, with the regulatory body ARJEL frequently being accused by companies for making the business unviable in that country. But past mistakes are being learned, as is shown in the case of Spain and Italy, who are in the process of allowing operators to interlink the player pools from both countries. This decision, which might come into effect by the end of 2013 is a step in the right direction, following the whole EU ethos of business transcending borders.

The UK on the other hand, has always had more positive attitude towards online gambling in general and poker has also benefited from it. But the industry is being weighed down by the fact that other EU member states, with whom UK share EU treaty agreements, do not have proper regulation matching that of UK. This has led to several complications in the past. Also, a recent amendment to the 2005 Gambling Act proposes to increase operator liability towards the government via increased tax liability which, according to some observers will adversely affect the overall profitability of the industry in the UK.

What the companies are left to

With US fast becoming a lucrative destination, companies like 888 Holdings are heading Stateside to get a piece of the pie. Bwin.party, in the meanwhile, has stopped taking new customers in 18 countries, primarily in Europe and some in South America. The main reason for this decision is the legislative concerns, especially in the case of countries like Greece, Poland, Romania and Cyprus. The move will allow Bwin to focus more of the US market, by hiving off its less profitable operations in smaller markets in Eastern Europe as well. Live tournaments and televised events like the immensely successful European Poker Tour (EPT, currently in its 9th season) continue to become huge crowd pullers, and companies like PokerStars and Party Poker host bigger and bigger online competitions in Europe. Even go-to destinations for online poker enthusiasts like Flopturnriver etc. indubitably have huge potential in Europe; the market is there with a dedicated audience. It just remains to be seen if the regulators wake up to this reality, the same way their American counterparts have. If they don't, companies will just head to greener pastures in Asia and America. And that would be a crying shame indeed. But the legislative climate seems to be slowly but surely changing. Things could very well turn out for the better.

 

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