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What does 2012 hold in store for online gaming and for poker in particular? The consultancy company, PwC recently released a report on the future of the global gaming industry. The report outlines a number of major trends that will create both opportunities and challenges for everyone involved in online poker.
Maintaining Liquidity
As more markets in Western Europe and the US look to regulate, the need for cross-border approaches is becoming more apparent. In countries that have already regulated, such as Italy, a critical issue for operators is the lack of critical mass which provides adequate liquidity for serious game play. If liquidity is a problem within a population of 60 million, then smaller markets that choose to regulate will definitely struggle to be successful unless there is a move towards cross-border and shared liquidity. Precedents have been set in Europe with the EuroMillions lottery across 11 countries and in the U.S. with the PowerBall multistate lottery. Meanwhile, regulators in Italy and France are rumoured to already have held secret discussions about cross-border co-operation. Increased liquidity is good for players, operators and those governments who seek to harvest taxes from online players.
Smart Taxation
Since taxation is the primary motive for many cash-strapped economies to introduce regulation of online gaming, the PwC report suggests that governments look to the unsuccessful taxation regimes in other jurisdictions before they seek to impose heavy taxes on players or operators. In France for example, the unreasonable levels of taxation have led to “disappointing levels of profitability” for operators and thus poor returns for government. Even the French regulator has admitted publicly that the tax regime is not working. Clearly, reasonable taxation on gross profits is a more viable option than directly on players or on rake which inevitably is passed on to players. Spanish authorities, who have just announced a delay in regulation by a further six months until June 30th, would do well to address the issue of player taxes before that date.
Differentiating Poker
Most poker players seek to have this game distinguished from other forms of online gaming where there is a complete absence of skill. Poker’s status as a skill-based game is deeply embedded in American cultural life and history. It is therefore the most socially accepted form of online gaming and it is for this reason that many expect it to be the first discipline where online providers will be allowed to operate on an inter-state basis. While there has been a lot of foot-dragging to date, the events of Black Friday together with the DoJ’s pre-Christmas apparent u-turn on its interpretation of the 1961 Wire Act clear the way for US regulation of online poker. US regulation will also set a benchmark for other countries on how to sensibly approach poker (hopefully).
Social Gaming
There is no doubt that 2012 will also see greater strides forward in the integration of poker within social networking platforms. While Zynga continues to insist that it will not expand into real-money poker, Facebook is making its intentions clear that it wishes to cash-in on poker. Furthermore, since social networks are so much embedded in mobile device usage; with these two forces combined we can really expect a surge in the participation in different variants of online poker over the coming months and years.
In spite of a couple of difficult years, PwC predicts strong global growth in online gaming between now and 2015. There will of course be challenges that operators and governments face, across the sector and in particular to maintain a strong poker ecology. In the midst of dealing with these challenges, the consumer must remain at the centre of all considerations. There is an explosion in entertainment choices and if online poker is to continue to grow in popularity then operators and governments must play their part in producing offerings that people are prepared to spend their time and money on.
The full PwC report Global Gaming Outlook: the casino and online gaming market to 2015 is available to download from their website. Also, check out Barry Carter's Predictions for Online Poker in 2012.
