Italy, France, Spain, Portugal Discuss Possible Shared Liquidity Italy, France, Spain, Portugal Discuss Possible Shared Liquidity

The regulators from four European countries convened in Barcelona recently for a two-day meet to discuss regulatory co-operation. As part of a general discussion on information sharing, the regulators discussed the possibility of shared liquidity in online poker.

The meeting took place June 19-June 20 between the Italy’s AAMS, France’s ARJEL, Spain’s DGOJ and the Portuguese Santa Casa da Misericordia de Lisboa (SCML), a charitable institution that operates the Portugal National Lottery.

According to a press release from one regulator today, “the meeting aimed at confirming their common willingness to promote an operational cooperation in the field of regulation and enhancing exchanges of information.”

In order to protect consumers against fraud and criminal activities and prevent addiction, the regulators agreed it is important to maintain open lines across borders, lay down a common foundation and swap notes on licensing criteria.

“In addition, discussions took place on the conditions necessary for a possible shared liquidity in certain games among some of the countries participating to the meeting,” it adds. Although not specified, online poker uniquely suffers from segregated player liquidity and was certainly the main point of discussion.

Spain, France and Italy operate the three main segregated player pools in online poker. Italy was the first in a new wave of European nations to regulate online poker, going live in 2009 and opening cash games in mid-2011. It completely segregated the player pool—Italians vs Italians only—and has seen declining player numbers over the last six months.

France followed a similar path: It regulated online poker in mid-2010 and required a separate player pool for dot.FR sites. It does, however, permit non-French players to play. But a high operator taxation forced many operators out of the market and those that remain complain the situation is unworkable. As a result of high rake and lowering interest, there also has been a sharp drop in player numbers in online poker.

Spain is the latest entrant, with its regulated gambling market going live on June 5. Like France, the player pool is segregated but international players are allowed on dot.ES sites (although PokerStars has chosen to keep it Spanish-vs-Spanish only). “Fiscal uncertainty” due to confusion over income tax has lead to disappointing early numbers and cash game figures continue to decline.

Portugal is the odd one out of the group. currently only the SCML can operate online services, which includes a lottery and online sportsbook. However—notwithstanding a fine against bwin for advertising its online services on Portuguese soccer shirts that was upheld by the European Court of Justice—its protectionist laws are seldom enforced, and Portoguese online poker players can openly play on PokerStars, PartyPoker and all other major sites. However, the cash-strapped country is now looking towards liberalizing its market, potentially fast-tracking through an open-market system this year. So it will be taking good notes from the successes—and failures—of its Iberian partner.

Formal meetings and agreements between regulators both in- and outside Europe is nothing new. Denmark signed Memoranda of Understanding (MOUs) recently, the UK Gambling Commission already has MOUs with European regulators, and both Spain and France have spoken before about cross-border cooperations. But the specific mention of shared liquidity can only be taken as a positive step for European poker players concerned about the fragmentation of the market.

The four will convene again in December 2012 to continue discussions.