It’s not deemed illegal as there are holes in the laws currently. But watch out for the decline, change and slow demise of on-line poker once it becomes legal.
The definition of “legal” is the government getting a slice of the pie. Yes, exactly like a mafia or union strong arm operation – charging you a fee for “protection”. Protection - from them of course.
From the ERG blog:
“The French Online Gaming Authority, ARJEL, has given 11 licensees an online poker licence: BetClic, Bwin, Partypoker, Everest, Chilipoker, PMU, Partouche, PokerStars, Sajoo, Eurosport, and Winamax.
These companies will be taxed 2% on all cash game pots and tournament buy-ins, including re-buys and add-ons, where applicable. There is a €1 cap for cash game pots but there is no cap for tournaments. Cash games pots where there is no flop are also taxed - including when everyone folds to the big blind.
Poker companies have to choose whether to impose this tax on their customers by increasing the rake and tournament fees, or take the tax from their own margins.
Poker industry leader Pokerstars has chosen to impose everything on the players, and this has caused a big stir, even leading to a three-hour-long “strike” on Sunday evening, with players sitting down at cash-game tables and then sitting out to block the seats.
What impact would that extra 2% rake have on the poker players? First of all, it turns most winning players into losing players but from a poker site’s perspective, but that is not necessarily bad. The bread and butter for all poker sites are the net depositing players. What is bad, though, is that it gives all players a worse user experience.
Without rake, poker is a zero-sum game. The rake makes an average poker player a losing player, and an increase of the rake will make an average poker player lose their money quicker. We ran a query for one million NL Hold’em hands played on Bodog on $0.10/$0.25, $0.25/$0.50, $0.50/$1 and $1/$2 to see what effect an increased rake from 5% to 7% and an increased cap to $3.5. This is exactly the rake structure Pokerstars.fr uses, but in euros. Under this structure, the rake would have increased with 36.7%. In the absence of the rake on pots without a flop, the increase would be 33.6%.
This increased price would give an average player 26.8 % less hands before he runs out of money. The “little” 2% extra rake may not sound as much, but 26.8% less entertainment paints a more troublesome picture.
Casual players typically do not understand or care about the concept of rake, so it will not have a negative effect on sign-ups but the decreased entertainment value per euro will have a significant negative effect on churn rates.
Another EU country, Sweden, chose a different path when they introduced online poker through government-owned Svenska Spel in 2006. Advised by poker professionals, they chose to offer 50% lower rake than the industry standard. The combination of this low price for poker with its Svenka Spel’s strong brand - via its 6,758 betting shops and €100m annual marketing spend – made Svenska Spel an instant success in the poker market. In 2007, it averaged 3,000–3,500 players per day, quite remarkable, especially given they only accept Swedish customers.
However, after only a few years, Svenska Spel's poker revenue is dropping, and in 2009 its net gaming revenue from poker was 22 % lower than in 2008. There are many possible explanations for this: the player pool in Sweden may not be big enough, the marketing has not been good enough or the poker boom is simply over.
It will be interesting to see how fast the French online poker market will rise and fall with the opposite price strategy, and if any poker company will manage to be profitable in that environment.” – end
I will have more opinion on this topic soon.
Government spoils everything it places its tyrannical blood-sucking hands on – and yet we still have Americans voting for more. Insanity is the only explanation that fits. – Nik Faldo
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Nik, there are some real problems with online poker. The fact that there is no such thing as a real randomly generated number - the basis for a true shuffle, periodic episodes of company insiders (usually techies) manipulating the system to have friends get winnings, player collusion via text or voice (phone) and lack of the player’s computer to the poker server encryption (for the game, not the money deposits) are all problems. Online gambling addiction also plays a role in the perception of the activity as something 'bad' to at least part of the general public and legislators alike.
But this is still a relatively young application of technology. I see a lot of online players complain about the 'system', (read bad beats), but they're still playing. I think I'm a pretty even player (not great, just even), but there are definite sessions where I get the bullet-proof cards, and those where I can't buy a hand. Does that mean the system is flawed, or is it just the 'law of large numbers' coming to bear?
Legislators want to write laws. That’s what they are elected to do. Of course they also want to exempt themselves and slip some pork in there, but that’s a different thread for another time. But everything can't be regulated and a lot of things that are 'regulated' are done so very, very poorly. So I agree with you that this would be a bad thing for online poker. I prefer to actually sit at a table and see my opponents, but my time constraints don't allow me to do that very often, so I play online instead.
In the absence of widespread instances of consumer fraud I don't believe there is reason for the government to regulate this activity, other than the financial part (deposits/withdrawals) that we expect with any online monetary transaction.
My guess is that word would get around to poker players quickly if a particular site was operating in a shady way and they would essentially be 'self-regulated' by the players.
Perhaps a NPP 'beer summit' on how to resolve this issue is in order. We could write a position paper (twss) and send it to the appropriate parties.
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