Black Tuesday As PokerStars Withdraws From Grey Markets And Cuts Affiliates

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Friday, October 3rd, 2014 | Written by Stephen Smith

In 2011 the Department of Justice shut down PokerStars and Full Tilt Poker’s operations in the US on a day that became known as “Black Friday,” and three years later many players from around the world are now experiencing what numerous American players went through in their own version dubbed “Black Tuesday”. This time around, however, it was the sites themselves which voluntarily withdrew their products from more than 30 countries across Africa, Asia and the Middle East, although their decision was likely necessitated by the terms of a new UK Gambling (Licensing and Advertising) Act which will come into effect in November.

Affected jurisdictions around the world

Amongst the 30+ countries that PokerStars and Full Tilt have now withdrawn their real money online poker games from are such legally-grey jurisdictions as Turkey, UAE, Bangladesh, Pakistan, Egypt, Qatar, Jordan, Kuwait, Senegal, Nigeria, Bahrain, Afghanistan, Palestinian Territories, Kenya, Mozambique, Rwanda, the Vatican, Iran, Iraq, Syria, Zimbabwe, Libya, Sudan, North Korea, Cuba, Myanmar and Yemen. Malaysia with a population of 28.33 million people was also added to the list and soon after one of the country’s top pros, Victor Chong, tweeted the following message:

“@pokerstars @PokerStarsAPPT tried to register for a tourney and this happened: No more real money games in Malaysia?”

RoW players share a collective shudder

Following announcement of the surprise news, PokerStars issued instructions to its customers requesting they withdraw their funds “at their convenience.” They were also encouraged to utilize the tournament tickets and Frequent Player Points (FPPs) they had accrued before withdrawing their money, with more information on the subject found here.

In addition, PokerStars issued a stark warning to anyone considering flaunting the ban, stating:

“Please be aware that using any technique to try to circumvent our automated restrictions is also prohibited, and may lead to your account being closed and the funds therein seized. Play-Money games will be still available for everyone to enjoy.”

Decision based on risk assessment

According to PokerStars, its decision to withdraw from numerous countries across the world was the result of a risk assessment carried out by the company, and as a company statement, read:

“Our management team and advisors regularly review our operations market-by-market to assess commercial opportunities and business risks for our brands. Following a recent review we have decided to stop offering real money games to players who are physically located in, or have a registered address in, a limited number of countries.”

Need to satisfy UK Gambling Commission

The “business risks” mentioned by PokerStars is most likely linked to the new UK Gambling Act which is slated to come into effect in November and requires all applicants for a UK remote gaming license to derive no more than 3% of their online poker revenues from unlicensed, grey markets, or else be able to provide legal justifications for offering iPoker in those jurisdictions without licenses.

The UK accounts for 8% of all world online gambling revenues and generates £2.5 billion ($4.26bn) each year in revenues, £329 million ($559m) of which comes from online poker. The UK will therefore continue to be an important market for PokerStars and so Amaya Gaming likely decided it was safer to exit these grey markets rather than jeopardize its operation in the UK..

PokerStars still in Canada

One significant country missing from the list was Canada, with Amaya Gaming, the parent company of PokerStars and Full Tilt Poker, having previously stated its commitment to staying in the country. Currently, however, only Canada’s provincial lottery corporations is permitted to offer online betting services and so it’s possible Canada may, too, soon be added to its list. Possibly backing up this rumour is the fact a few months back PokerStars cancelled its partnership with the Montreal Festival, stating at the time its decision was “due to unforeseen circumstances.”

Nevertheless, Canada will continue to be an important market for Amaya Gaming, a Canadian company itself with a listing on the Toronto Stock Exchange, and so any decision to exit the country’s iGaming market will not be taken lightly by the company.

PokerStars cuts affiliates

Finally, PokerStars has announced it will also be terminating its agreements with a number of underperforming affiliates who were no longer actively recruiting new players and generating a satisfactory level of new business. This has sparked concerns that the poker room may eventually cut ties with with its remaining affiliates, which would represent a major blow to the affiliate industry. Furthermore, PokerStars apparently has the right to terminate its affiliate agreement with just seven days notice, and as one affiliate explained to cardschat.com:

“Apparently most, if not all, of the affiliates terminated received little to no notice that their account was under review. Instead, they received only a notice that their account was being terminated. This made for headlines on many industry-facing sites, as well as for lively commentary in various poker forums.”