iPoker Joins EU Liquidity; PokerStars & Playtech Prep for Switzerland

November 28, 2018

The online poker ecosystem is constantly evolving, as online poker companies expand and merge. The latest developments in the market involve iPoker launching in the shared European market, The Stars Group (TSG) planning to integrate recently acquired Sky Poker, and both of these iGaming companies looking to expand into the newly regulated online gaming market to open in Switzerland next year.

iPoker to Become Fourth Operator in Shared European Market

iPoker got the green light to launch shared French-Spanish games and its first foray into the Southern European shared liquidity network is now underway, according to Poker Industry PRO ($). After receiving shared liquidity poker licenses from French regulator ARJEL back in March, iPoker only recently got approval from Spanish gambling regulator DGOJ to clear the final hurdle and planned for a Nov. 26 launch.

Several rooms already operate on the iPoker network in the segregated markets of France and Spain. In France, Malta-based Kindred Group operates Unibet.FR and BetClic offers online poker, casino and online sports betting through its subsidiaries. In Spain, Bet365, Betfair, Casino Barcelona, and Sportium all share liquidity by operating on iPoker’s online poker software.

BetClic recently announced on their website that a new EU platform will merge its French and Spanish networks, allowing players in the two countries to access a shared player pool. In order to gain access to the merged network though, players must go through a verification process.

“In accordance with the new regulations in force, players holding a provisional account will only have access to French tables,” explained a company rep on the BetClic website.

The Evolving Southern European Shared Liquidity Market

With its shared liquidity launch, iPoker becomes the fourth operator to join the party, following PokerStars (January 2018), partypoker (June) and Winamax (July). PokerStars remains the only operator to have added Portugal to their shared pool, which they did in May, while the others have only managed to bridge networks across France and Spain.

As has been the case with the other online poker sites, the relatively small segregated markets operating on the iPoker network are expected to experience significant growth with the player pool merge. Less than one year after their shared liquidity launch, PokerStars just wrapped up their SECOOP series that demonstrated the success of shared liquidity with participation from more than 38,000 players across France, Spain and Portugal.

As for Italy, anti-gambling positions among a newly elected government may continue to prevent the country from joining the shared liquidity network laid out in the international pact signed in July 2017.

Switzerland Legislation Paves the Way for Regulated Online Gaming

The Federal Council of Switzerland is the latest governing body to pass favorable gambling legislation that includes ending an existing ban on online gaming. The Money Gaming Act enacted on Nov. 7 opens the way for existing licensed casinos to bring casino games and poker online beginning Jan. 1, 2019 with licenses expected to be issued starting in July.

In the works for six years, the new gambling rules follow the same protectionist model used in Belgium and more recently in the United States, with online operators required to hold a brick-and-mortar casino license. For operators like PokerStars and Playtech, operator of the iPoker network, it will be necessary to partner with one of 21 licensed casinos operating in the country.

PokerStars Poised to Partner in Switzerland

While their land-based partner is yet to be announced, The Stars Group is clearly in preparations to make their way into the nascent iGaming market, as reported by PRO ($).

“In Switzerland the new framework is expected to come into place next year,” said Brian Kyle, CFO of The Stars Group, in a recent conference call with analysts. “We are looking to offer our poker and casino products in partnership with a local casino within 2019.”

“Switzerland is also a great market for us,” added CEO Rafi Ashkenazi. “It has been growing very, very meaningfully in the past couple of years and we are hoping to continue to grow it because there is such a positive momentum in the business with Switzerland.”

Playtech Partners with Swiss Casinos

Playtech will not miss out on the Switzerland online gaming opportunity either, as it was announced by Swiss Casinos in September that the Zurich-based casino group would be partnering with Playtech to bring their casino games online.

“We are delighted to have found Playtech as an internationally experienced and innovative partner,” said Marc Baumann, CEO Swiss Casinos Group. “This will enable us to offer our customers in Switzerland an attractive offer.”

While Playtech’s casino and slots offerings will likely be utilized, Swiss Casinos may also look to offer online poker on iPoker’s global international network, though those details will likely not be declared until closer to launch.

Time will tell whether other operators attempt to get a piece of the pie in the newly revamped Swiss iGaming market, but PRO notes that it may not be the most attractive of markets for other operators with TSG’s apparent dominating position of market share and the potentially high cost of entry.

"Bad Actor" Clause Could Pose an Obstacle

Also unclear is how the “bad actor” clause will affect some potential operators. As Swiss legal and compliance company MME reports, the bill necessitates a “good reputation” as a prerequisite for a license.

“A good reputation is not given if someone carries out or has carried out money games without a Swiss license, which is particularly the case if the Swiss market has been targeted from abroad,” according to MME. “The requirement of good reputation is generally reviewed retroactively for a period of five years when an application for a license is submitted.”

It would seem that such a clause could provide a barrier to most operators, including PokerStars and Playtech, who have taken any real money bets from players in Switzerland in the last five years. How this clause will be interpreted in the licensing process remains to be seen in the coming year.

The Future of Sky Poker

The Stars Group’s acquisition of Sky Betting and Gaming (SBG) earlier this year includes not only Sky Bet and Casino brands, but also smaller bingo and poker sites – including Sky Poker.

As Poker Industry PRO ($) reported, The Stars Group CEO Ashkenazi said in a conference call to investors earlier this month, “Of course, the aim is to obviously migrate the Sky Poker business into the PokerStars [business]. So something along the lines of 'Sky Poker Powered by PokerStars’ is something that we are definitely looking at for the U.K. business.”

Merging poker rooms into other rooms, in many instances even retaining skins with the network’s branding, is nothing new. The same happened in 2016 when Full Tilt customers were integrated onto PokerStars’ network with Full Tilt branded skins still maintained. Other online poker networks do the same, and it’s possible that Sky Poker will live on through maintained skins even after it’s integrated.

Sky Poker’s Journey

The small-scale UK poker room with only around 200 concurrent players in the cash game pool has been around for more than a decade and stands to benefit from integrating with the massive online poker operation of PokerStars, which has an estimated 8,500 concurrent players, according to PokerScout.

Sky Poker launched in February 2007 along with Sky Poker TV, the satellite channel that brought poker to the homes of millions of people in the U.K.. There was even a Sky Poker Tour that found some success in the U.K. before going on hiatus in 2013 and making a bit of a comeback this year.

Sky Poker enjoyed some growth with a major platform upgrade in 2013, a mobile app launch in 2014 and a revamped rewards system in 2015, but the vertical seemed to hit a wall in 2015 when Sky was sold off from SBG. The Sky Poker channel quit broadcasting and the Sky Poker brand stagnated. The poker brand’s revenue declined 11 percent year-over-year in Q3 2018, as reported by PRO.

Still, the TSG Q3 financial reports showed SBG having generated $2.9 million in online poker revenue for the quarter. Though accounting for only 1.3 percent of TSG’s poker revenue, the SBG annual online poker revenue is estimated at $11.4 million. But perhaps more importantly for TSG is the heightened potential for sports and poker crossover from an expanded customer base.

“When it comes to poker, I mean PokerStars is by far the best poker platform in the world and the best poker offering in the world, again, by far,” said Ashkenazi. “So we would expect to see a higher degree of cross-sell from sports into poker and obviously we are going to see meaningful growth in ARPU [Average Revenue per User], that’s definitely something that we have on the roadmap.”

While the integration of Sky Poker’s network onto PokerStars appears inevitable, its imminence is to be determined as Ashkenazi mentioned that migrating Sky Poker is not necessarily an immediate concern: “…It’s definitely something that we are going to deal in the medium term.”

_{Lead image courtesy of www.freeimages.com/DavidHart}

_{The Stars Group owns a majority shareholding in iBus Media.}

Follow on:

• Tags

  PokerStars Playtech iGaming Switzerland Unibet Poker iPoker