Opening & Closing Poker Markets

Posted on November 5, 2008 
Filed Under General

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When the new more open U.S. government takes over next year, there is every belief that their national prohibitionist position on online gaming will at some point be reversed. Eventually the U.S. will regulate the online poker industry for U.S. players.

Let me suggest that this will make similar decisions in all parts of the world much more difficult. Let's take Sweden's Svenska Spel gaming monopoly for example. Despite EU pressure Svenska Spel and other national owned and operated gaming monopolies continue to both operate and exclude other online sites from operating within certain geographic boundaries.

There are advantages to government run sites. A uniform, non-English language is often used. Social and moral concerns are addressed within the strictures of a unique cultural set. And the government makes a lot of money on the rake.

But here comes the not too distant crisis of conscience and of pocket book. As far as online poker, the U.S. constitutes the largest revenue stream and dollar for dollar, euro for euro, lira for lira, peso for peso; the Americans gamble for more cash then any other nation on the net. This, of course, has to do with multiple factors of disposable income, as well as high speed internet penetration.

The problem? Do you want to keep these American gamblers out of your market, when they could substantially increase your revenue by inviting them in?

Well no, you say, bring them in to our website.

Here is the problem that all nations will face in the new unfolding open online marketplace. Countries, like the US, will ban your site, if you ban their sites. So Svenska Spel will have to let their citizens out, if they let others in. This will be a hard decision for some national gaming monopolies but the change in the U.S. law will also make the overall EU decision easier. The monster revenue potential of opening to the United States market will be just too much to ignore. What will break down trade barriers is not thoughtful regulation but the specter of lost profits.

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