International Game Technology (IGT) recently revealed that they had dropped their online poker sector in Europe. This news came as a huge surprise to the industry as it was unexpected.
The reasons given by International Game Technology for discontinuing its online poker operations in Europe involve a failing business model.
According to the company which seems to have a lot of drastic changes in mind for its business plan, the current functioning business model in the online poker sector in Europe was affected by the changes in online gambling law introduced in several European countries.
One of the reasons why this move has surprised many in the industry is because International Game Technology has been known to have invested a lot of money in the European online poker sector. Only last year, IGT purchased Entraction, an online poker software operator that has a strong player base of more than 4 million gamers. Entraction is based in Sweden and was acquired for a sum of $115 million by International Game Technology.
A few months ago International Game Technology announced plans to provide online poker games to Nevada and was one of the first online gambling software operators to acquire a license from the Nevada gaming regulators. They have a contract to supply interactive gaming systems to the region as per the new rules instituted by the state. International Game Technology stated that they would be using their Entraction technology platform to supply online poker to Nevada.
Now however, it has become plain that the Entraction technology platform will only be used in the US as of now, and will not be catering to a European player base.
According to Patti Hart, the Chief Executive Officer of International Game Technology, many European regions had altered their gambling laws and had stopped residents from playing online poker with players in other European countries. “There is less profitability and the product becomes less interesting,” she said.
The CEO also went on to explain how the system had moved from “dot-com to a dot-country,” she also referred to the United States, drawing a parallel on the laws that keep online poker within the state, not allowing players to interact with poker players from other states.
Hart stated that Nevada might need to “have a look at their own economics” as it was far more difficult to profit and that “it’s much more challenged when it’s a single state.”
