Ahead of the plans by the “Group of Five” for a shared liquidity between its nations, two countries involved in those discussions have been making some changes with their programs. In one, a change to their licensing procedures is in the works while a politician in one of the other countries in the agreement threatens to scuttle the entire plan before it even gets off the ground.
Spain, which fenced off its country’s gaming industry in 2011, has moved to strengthen its licensing procedures from what it used previously. Under the new rules, operators who wish to offer their gaming in Spain will have to submit their applications within the next year. After that, the gaming regulators in the country, the Direccion General de Ordenacion del Juego, will have up to six months to approve the application.
The changes are subtle when looking at the previous laws in Spain. Under the old laws, operators had to obtain a “general license” from the DGOJ before they could move on in the licensing process. The operator would then have to file an application for each “service” (casino gaming, slots, bingo, poker, etc.) that they wanted to offer, creating a logjam of paperwork not only for the online companies looking to enter the Spanish market but also for the regulators.
While Spain is looking to streamline its process, Italy is looking to take the entire agreement and toss it on the scrap heap. A member of the Italian Parliament, Franco Mirabelli, is concerned that the liquidity agreement will permit money laundering, an old Mafia practice that, in the land of the birth of Cosa Nostra, still has an impact. Mirabelli also claims that the new liquidity agreement would put Italian players at risk and that there isn’t a need for Italy to join into the liquidity agreement and expand gaming in the country. These challenges have been echoed by others in the Italian government but, although it puts Italian participation in the treaty at risk, there isn’t enough support to remove Italy from the deal.
European online poker has been stagnating since the 2011 “Black Friday” indictments in the States of America, despite the fevered attention given to it by online gaming companies. Several countries, including France, Germany, Switzerland, Sweden, Spain, and Italy, removed their players from the international market – “fenced off” their citizens – and introduced regulation that would accurately tax the companies providing the services to keep the revenues for the individual countries. Some countries, especially France and Italy, went to the point of requiring that the companies who wished to provide online gaming and poker in their countries to base the servers for the games in that country. This is the reason you will see things like “PokerStars.fr” or “PokerStars.it” when you look at industry ranking sites such as PokerScout.
Fencing off the individual countries came with a drawback, however. Revenues for the gaming outlets in the fenced off countries began to stagnate or even decline. France, with only 60 million citizens, saw revenue from their online outlets fall precipitously. Italy was robust with its fences up, but Spain had to increase the number of licenses available and allow for casino gaming to keep the revenues from crashing (poker, however, continued to decline).
The declining revenues brought five countries to the table for sharing liquidity – players – at the start of 2017. Those countries – Spain, Italy, France, Portugal, and the European Union – finally came to an agreement in July to share liquidity between each other. The agreement would see players in France go from having a pool of roughly six million players (10% of the country’s population) to roughly 75 million (10% of the combined population of the five nations).
There is one country that would be left out of the mix. The United Kingdom, who voted to exit the EU in 2016, would not be a part of the new arrangement because of their imminent departure from the EU. It is not likely that an individual negotiation to allow for British subjects to join in the new liquidity between the countries would occur because of their departure from the 26-member EU.
The agreement would require all operators to have licenses with each country and the gaming outlets are jumping to get in the game. PokerStars was the only gaming outlet licensed in each jurisdiction, but France’s Winamax is looking to be licensed outside French borders and in the partner nations and 888 Holdings is also seeking licenses for all the countries involved. While there is no fixed date for the liquidity sharing to begin, it is obvious that the gaming outlets as well as the countries involved are making their moves to maximize their revenues ahead of the startup.
