France Votes to Accept iPoker Sharing with other EU Countries

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Monday, October 3rd, 2016 | Written by Shane Larson

In the EU, online poker markets have struggled to get off the ground, but not due to a lack of interest, but because the segregated player pools of individual countries has resulted in an unviable iPoker playing environment for players and operators alike. Fortunately, regulators in the European Union seem to have now acknowledged the error of their initial setups, with France voting last week to embrace an iPoker liquidity sharing agreement with some of its other European neighbors.

Landmark Meeting of Regulators

In mid-September, regulators from a number of European Union iGambling markets met in Paris to discuss the problems posed by a lack of online poker liquidity in their respective countries. Representatives from France, Spain, Italy, Portugal, Germany, the UK and Austria were all present for the event.

Currently, the UK is the only country on the list that has laws set up which allow player pooling or mixing UK players with poker players from other regulated markets. After resisting the model for several years, however, it seems that Spain, Italy and France have now finally admitted that the UK system is preferable to their own currently segregated one. Following the meeting in Paris, representatives from the countries have gone on record saying that not only has the segregated system caused liquidity problems, but it has also made it difficult to offer big tournaments, and even attract operators.

French Parliament Adopts iPoker Sharing

Before last months meeting in Paris, the French government had already signaled its dissatisfaction with its ring-fenced online poker market. In May, the Senate subsequently approved amendments to the country’s digital bill permitting shared player pools with other EU nations. Last week, the French Parliament then adopted the amendments, and providing the bill is signed off by French President Francois Hollande in the next fifteen days, it will then pass into law.

The move is being seen as a vital way of giving France’s iPoker market a huge liquidity boost, ultimately resulting in higher poker revenues and therefore gambling taxes for the government. The amended digital bill doesn’t stop with just online poker, though, and in addition to measures to reduce the social risks associated with gambling, provisions have also been made to regulate eSports contests being held in the country. As part of the bill explains:

“Once the Digital Republic Act and its implementing decrees have come into force, they will excuse certain eSports contests from the general prohibition on lotteries if players are physically present at the competition.”

Obstacles Still Ahead

Although France, Italy, and Spain all seem eager to begin pooling players as quickly as possible, industry insiders warn that it will likely be some time before this desire can result in any real action, with the biggest barrier to desegregating the European poker markets being taxation. Under EU laws, online products like poker may be taxed, and consumers are expected to pay a type of tax called VAT that is similar to sales tax in the USA. Each country has its own VAT tax rate and while the minimum rate is 15 percent throughout Europe, in some countries, such as Hungary, the rate can be as high as 27 percent.

For operators, trying to collect the VAT tax from players that are located in different countries will be very difficult. Sites will likely have to increase rake in order to collect the requisite taxes from players located in countries with high VAT rates, which is certain to dismay players who are not located in these countries.

Another major taxation barrier to player pooling is the way the French online poker system is taxed in general. In every other European nation, gambling operators are taxed based on their gross gaming revenue; however, France taxes regulators pot by pot, assessing a 2 percent tax on each pot played. Therefore, if players from France are seated at an online table with players from other countries, how will operators determine what is taxed? While there will be a way, getting things in place are likely to prove time consuming and complicated.

Clearly, in order for online poker segregation to come to an end, countries need more than just willingness to pool players, but also to rethink their own laws and address inconsistencies.