France, Spain, Portugal, Italy to Sign Online Poker Liquidity Sharing Deal Next Week

What is it with governments and online poker? Why is it so hard for lawmakers to understand even the basics of how the industry works? Why is it so hard for some lawmakers to even take an hour or two to TRY to understand how the industry works? When legislators and regulators in France, Italy, Portugal, and Spain decided to keep their countries’ poker player bases ring fenced from the rest of the world, I have to imagine they did so with their thumbs up their asses, all the while mumbling something about, “it’s too hard to keep track of different countries’ regulations.”

Well what do you know, some people finally came to their senses…kind of. On Friday, France’s gambling regulatory body, ARJEL (L’Autorité de regulation des jeux en ligne), announced that France will ink a deal with Spain, Portugal, and Italy to have the four countries share player liquidity. Signatures will be put on paper on Thursday, July 6th.

A brief press release was issued and reads as follows:

The Italian, French, Portuguese and Spanish online gambling regulatory authorities will sign an agreement concerning online poker liquidity sharing on 6 July 2017 in Rome.

This agreement will set the basis for cooperation between the signing Authorities in this context and will be followed by further necessary steps within each of the jurisdictions involved in order to effectively allow for liquidity poker tables.

A common press release will follow the signature.

Obviously, we do not know much about it at this point, but per the final sentence above, it seems like more details will follow next week.

So this is clearly good news for poker players in France and the other three countries. I made use of the phrase “kind of,” though, because while the powers that be finally made a decent decision in regards to online poker, it looks like the shared liquidity will only be among the four countries, not with those four and all other countries that are not ring fenced. Thus, it will be a truncated “.eu” setup of sorts, not a “.com.”

As readers of this site likely already know, player liquidity is the lifeblood of an online poker room. The more players a poker room has, the more attractive its games look to prospective players. When these players see all the activity at the tables and decide to sign up, the tables get even more populated, making the poker room look even better. Conversely, online poker rooms with little activity do not attract more players, resulting in a death spiral as player numbers dwindle.

Naturally, the larger a population the online poker rooms can draw from, the more players they will be able to attract (all things being equal). When France, Spain, Portgual, and Italy decided to blockade themselves from each other and the rest of the world, they unnecessarily limited their potential player pools, putting their online poker industries behind the eight ball from the get go.

The largest online poker room that serves players from only one country is Winamax.fr, which is a France-only site. With a seven day average of 900 cash game players according to PokerScout.com, it ranks as the seventh largest online poker room in the world, miles behind PokerStars.com (11,000 players) and the IDNPoker Network (4,400).

The next largest rooms specific to one of the four countries in the deal are PokerStars.it and PokerStars.es, which each have a seven day average of 650 players.

At least they have partially figured things out faster than has the United States, where online poker can only be legalized and regulated on a state-by-state basis. And even when a state regulates online poker, it is still limited to a pool of players within its borders unless it comes up with an interstate compact with another state with regulated online poker. It’s so ass-backwards.

This announcement was previewed about a month ago (I suppose this announcement is really a preview of next week’s press release) when ARJEL published its 2016 calendar year annual report. In the report, ARJEL said that the October 2016 Digital Republic Act specified that any liquidity sharing agreement must satisfy the following conditions:

– Mutualisation (shared liquidity) is European. It is therefore authorized only with the Member States of the European Union, though it is enlarged to include the European Economic Area;
– It can only be set up with [EU member s]tates which have regulatory requirements equivalent to ours;
– Only “audited” players will be allowed to participate in the shared-liquidity tables (this refers to secure player-identification and -verification requirements);
– Finally, in order to be operational, the liquidity-sharing deal must have been the subject of an agreement with the regulators of the partner countries, within the framework of a cooperation agreement.

Even when the agreement is signed next week, it will still be until next year or even the year after that France, Spain, Portugal, and Italy will be linked. Trade agreements, operator evaluation and approval, and the like still await before liquidity sharing can officially begin.

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