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Mansion Poker Leads Possible UK Online Gambling Exodus

Gibraltar-based Mansion Poker this week announced that it will be exiting the United Kingdom online gambling market in advance of licensing and regulatory changes in that country that will either force companies to seek formal licensure and pay taxes on all business generated from UK bettors, or to abandon the UK market altogether.  The change is only in regards to the site’s poker offerings.

mansionpoker-logoMansion’s intent to abandon came in the form of an e-mail sent to UK customers advising them that the firm’s services would no longer be available after September 15th, the deadline established by the UK for the filing of an application for licensure.

Pieces of the e-mail sent to affected players have appeared on various player forums.  The most complete rendition to appear to date is likely the two segments in a PokerNews update, explaining the Mansion pullout.  Those excerpts:

Due to changing regulations regarding online gaming in the United Kingdom, we must inform you that Mansion Poker is required to close its doors to UK players on September 15th, 2014. As a result, we kindly request that you withdraw any and all funds you have in your Mansion Poker account.

We have found an exceptional gaming alternative for you: Titanbet.co.uk. You are invited to join this new reliable and secure brand for continued online poker enjoyment.

At Titanbet Poker you will continue to play the fast-paced tournaments and cash games of the iPoker Network, and you will feel comfortable with the familiar features of the software. In addition, Titanbet Poker will offer you expanded poker promotions that you will be sure to enjoy. Please click here {link} to go to Titanbet.co.uk, download the software, and create a new account. You will receive a 200% First Deposit Bonus* up to £1,200 on your first deposit at Titanbet Poker.

After you have created your account, please contact Titanbet Poker support. The new room will match your Points and VIP level from Mansion Poker so that you can get a head start in your poker play.

Mansion has not responded to media requests for confirmation of the pullout, nor has the company issued an official corporate statement to date, though it should be noted that per a clarification from the company, the withdrawal will affect only the site’s poker offerings, and not its online casino operations.  Mansion, an Asia-oriented brand with significant Pacific Rim investors, debuted in 2004 with plans to make a major impact in the burgeoning United States market, but was among the companies most affected by the US’s implementation in 2006 of the Unlawful Internet Gambling Enforcement Act (UIGEA).  Mansion had already committed many millions to a pay-for-play TV-poker effort (Mansion PokerDome), but pulled the plug on both that and its fledgling US business after the UIGEA went into effect.

Mansion later became one of dozens of firms to relocate its corporate headquarters to Gibraltar to take advantage of that protectorate’s business-friendly tax shelters, which have come under siege from the new UK laws.  Many of the Gibraltar-based firms generate significant online revenue from UK players while paying little or no tax.

Taxation is only one of several controversial elements of the new UK laws, which are set to go into effect on October 1st.  Formal licensing is also required, with registration under third-country “flags of convenience” no longer allowed, as the UK will begin active regulatory oversight itself.  Only fully licensed and regulated firms may market their gambling services to UK players, with significant fines awaiting any other firms who attempt to circumvent the new UK laws.

That, in turn, leads to three possible choices for as many as 150 global gambling firms who currently and largely unofficially service the UK market.  The firms can seek formal UK licensing, abandon the UK market altogether (as Mansion’s poker division plans on doing), or attempt to service the country in a “rogue” (gray market) manner, something only the smallest and most borderline of companies are likely to attempt.

For most countries, the choice will be to apply for UK license or leave that market, despite the ongoing efforts of the Gibraltar Betting and Gaming Association to block implementation of the new UK laws.  The GBGA represents about 30 online betting companies, the majority of whom were once based in the UK, and many of which still trade openly on British stock exchanges.

An update from Mansion described as “very marginal” the impact of its UK-related poker business, since it’s a much larger player in the Asian gambling space.  Other firms with a relatively small focus on the UK are likely to follow suit.  Dozens more are expected to apply for formal licensing, with brands from Playtech (including the aforementioned Titanbet.co.uk) one of several known to be in the application process.

While the results of the law’s implementation, the resolution of the GBGA’s legal challenge, and the final restructuring of the UK market remains to be seen, one possibility is that many UK-facing companies will follow the Playtech / Titan Poker lead, and establish separate domains, perhaps even to the point of artificially ring-fencing UK-based players.  While this would have no effect on players in house-banked games, a possible virtual ring-fencing could affect the vibrancy of the UK and global online-poker player pools.

Several different solutions to the new UK licensing mandates have been proposed, and it remains to be seen exactly which solutions eventually work for those involved.  UK players continue to have a multitude of online gambling options, with the loss of a couple dozen peripheral players unlikely to make a major dent in the available services.

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