French Regulatory Commission ARJEL Recognizes Need For International Online Poker

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In what might be a potential signal to the United States as it battles with the question of regulated online poker, the French regulatory agency in charge of administering the country’s system admitted recently that there may be a need for relaxing their rules on their country online poker industry to allow for the international pooling of players.

ARJEL, the agency in charge of regulating France’s online poker industry, released their revenue figures earlier this week for the 2012 calendar year. While their online tournament revenues rose by 21%, cash game revenues declined by 5%. As tournaments make up less than 20% of the action on the licensed French sites, this led to an overall decline in revenues in France’s country specific online poker industry.

With this in mind, the president of ARJEL, Jean-Francois Vilotte, admitted for the first time that there may need to be some changes in French regulations to allow for international play within the nation’s borders. Vilotte and ARJEL are recommending pooling cash poker tables to allow French players to play with other European Union countries that are “compatible” with the French gaming regulations. “The attractiveness of poker…is a matter of concern,” Vilotte stated.

There are several operations in the European Union that have set up these “nation specific” regulations, which require operators to be licensed by the country and provide sites specific for that nation. Italy, Spain and Portugal all have “nation specific” sites, putting penalties on companies and players who step outside of such sites to participate in online poker and gaming opportunities. Without a pooling of players – as Vilotte has suggested – revenues could potentially continue to decline.

With a population of over 65 million, it would be thought that France has enough of a player base to be able to prosper. Taxation on the revenues of online poker in France is 2% per cash game pot, vastly higher than in other “nation specific” countries such as Italy (60 million) and Spain (47 million). This is viewed as the reason that French players have been departing the cash games.

The realization by ARJEL – and the other “nation specific” operations in the European Union, who are internally discussing the pooling question – should send a signal to the current state of affairs in the United States when it comes to online poker. Late last year, the drive by Nevada Senator Harry Reid for a federal resolution to the online poker question fell through, leaving it to the individual states to pick up the ball.

While Nevada has licensed 17 potential operators and software providers for its intra-state gaming system, none of those licensees have actually stepped forward yet to open up shop (it is expected by spring 2013 that one will come online). Looking at its population of 6 million, Governor Brian Sandoval has seemingly come to the same realization that France’s ARJEL has, making a push to pool players with other states that could license online poker to provide a multi-state network. That push, as of today, has not brought about any changes in Nevada’s online poker regulations, however.

The only other state that currently has any regulations on the books for online gaming or poker is Delaware (full online casino gaming). In viewing their population (roughly 900,000), it would be critical for the state to potentially improve their player base through such a compact with Nevada lest they be unable to provide enough “action” to draw any companies into their game.

A linking of Nevada and New Jersey would improve situations for both states. In 2010, New Jersey’s population was listed at slightly more than 8.7 million people (according to the 2010 Census), but there are a few obstacles that would have to be negotiated before the two states could join forces.

First off, the bill currently sitting on Governor Chris Christie’s desk has yet to be signed by the governor (there are no indicators that Governor Christie is going to make a decision about the subject anytime soon). Secondly, the current bill also states that all gaming must originate from Atlantic City (a regulation in place in the New Jersey Constitution), something that might be violated by a compact with Nevada. Finally, the bill also opens up for full casino gaming, while the Nevada regulations only offer online poker for its residents.

All other states, including California (the largest state in the U. S. at over 37 million people), Iowa and Illinois (all states that have been rumored to be eyeing online poker or gaming regulation), have no regulations on the books for moving into the online poker or casino industry.

To have a vibrant online poker or casino industry, there have to be players. It seems that the “nation specific” countries in Europe are learning that and it would be something that the United States – whether in a state-by-state operation or a federal one – should definitely take into consideration.

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