Poker Continues to Decline Under Italian Regulation

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Italian gaming regulator AAMS has reported results for the first four months of 2012. Cash and tournament poker revenues have continued to…

Italian gaming regulator AAMS has reported results for the first four months of 2012. Cash and tournament poker revenues have continued to fall.

PokerStars continues its advance in the market, increasing its market share to 26%. It has closed the gap with the Microgame from 3.87% to just 0.38% in the last four months.

Collectively, sites on Microgame.it, also known as People’s Network, still have the largest market share with 26.38%. Playtech, bwin.party and Lottamatica have also all made small gains after losing ground earlier in the year.

Poker cash game Gross Gaming Revenue (GGR) fell almost 10% from March to April, and is down 26.6% since the start of the year. Tournament revenue has fallen 12% in the same period.

Pokerfuse recently reported French regulator ARJEL’s latest numbers which showed an even greater fall in the popularity of poker on state-regulated sites.

Italy was the first in a new wave of European nations regulating online poker. It first went live in 2009, restricted to poker tournaments only. Cash games opened up in mid-2011 and initially flourished. However, the market has failed to stabilize.

The decline of poker in France and Italy might be attributed to the economic crisis were it not for the fact that both French and Italian regulators have reported gains in overall GGR across all online games: Losses in poker have been more than offset by gamblers wagering more money on casino games and sports betting.

AAMS regulated sites currently pay a 20% Gross Profit Tax (GPT). A study by accounting firm PriceWaterhouseCoopers suggests that a GPT above 15% actually reduces Gross Gaming Revenue. Online poker is particularly sensitive to high taxation, as high rake stagnates game liquidity and blocks growth.

Thankfully, rumored tax rises in February this year were abandoned by the Italian Government; any tax increases will likely have the reverse effect, killing the online poker market and further reducing tax revenue. However, in the current parlous state of Italian Government finances, tax reductions are unlikely. It can be expected that the next quarterly report from AAMS will show poker’s continued decline.

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