The European Commission (EC) has given its approval to the technical standards proposed by Portugal for sharing player liquidity with other EU jurisdictions according to a recent report.
The approval was received after a lengthy process which started last year when Portugal’s gaming regulator, Serviços de Regulação e Inspeção de Jogos (SRIJ) developed a framework to guide liquidity sharing negotiations and later submitted it to EC in January 2017 after gaining an internal greenlight.
So far sports betting and casino games segments have gained more attention than online poker in the country. Portugal’s regulators initiated the process of issuing licenses last year under the new gaming regime which was rolled out in 2015.
The first license was given to French operator Betclic Everest Group for sports betting and followed another sports betting license for Bet Entertainment Technologies. Estoril Sol became the first operator to get an online casino license and finally PokerStars which exited the market in 2015 was given an online poker and casino gaming license, another first in the country.
With a population of around 10 million, Portugal might struggle to have adequate liquidity for a strong online poker market. Ring fenced operations for poker have seen limited success across Europe. Countries like France, Spain and Italy, who have ring fenced operations have recorded declining revenue partly due to poor liquidity and partly due to heavy taxes.
In response, gaming regulators have suggested pooling player liquidity as a means to boost participation and consequently revenue. Portugal might begin negotiations first with France as it already has received legislative approval to share liquidity. Other counties like Spain and Italy have proposed similar plans but are yet to get approval.
PokerStars may well be the biggest beneficiary from the measure as the site has existing operations in several other EU jurisdictions. Another operator likely to benefit is French gaming firm Winamax which has indicated in recent days that it is looking at expanding to neighboring countries.
Even with legislative approval for liquidity sharing, industry observers point out that the track record for its actual implementation is poor, as seen in the case of the United States. The states of Nevada and Delaware have a pooling deal in place for the last couple of years, but nothing significant has come of it so far.
Similarly Nevada has an agreement with the UK for sharing liquidity but no concrete action has yet come out of it as of now. The primary hurdle for its implementation is the high level of complexity with regards to technical, legal and logistical aspects of sharing liquidity.