5 Big Problems with Portugal's Ring-fenced iPoker Market

Portugal recently announced plans to ring-fence their online poker market, falling in line with European neighbors France, Italy and Spain. This move is peculiar considering that the Portuguese government said they were trying to avoid mistakes made by other countries that have legalized online poker. And it would seem that the chief mistake to avoid would be ring-fencing their iPoker player pool, given that France, Italy and Spain have struggled mightily with this approach. The deed is already done, though, and here are five big problems that will arise as a result.

1. Portugal Online Poker has Little Chance of Success

With only about 10.5 million residents, Portugal already faces an uphill battle in trying to establish a successful iPoker market. But without shared liquidity, the Portuguese market figures to be very insignificant when compared to other countries. To make a comparison, consider how Spain, which has 47.7 million residents, only averages about 1,500 cash players an hour (according to PokerScout.com) — and that's with decent liquidity. Without this same liquidity and almost five times fewer people, Portugal would be lucky to average 250-300 players an hour.

2. Big Poker Sites are turned off by Portugal

Plenty of online poker rooms were at least interested in the Portuguese market. However, now that the coastal country has opted not to share players, major poker sites have little incentive to consider this market. This is especially the case when considering that the government plans to tax operators between 15% and 30% of their annual income. PokerStars, Full Tilt, Ladbrokes, PKR and William Hill have all decide that the combination of a ring-fenced market and high taxes isn't worth entering Portugal.

3. This doesn't bode well for Other Countries considering Online Poker

Some countries/states around the world continue to take a wait-and-see approach with regard to if they'll legalize iPoker. And so far in Europe, the overall results have not been great; France, Spain and Italy are oft-cited examples of how online poker won't provide a rush of tax dollars. Based on the first two factors we discussed, it's very likely that Portugal could become yet another example of how online poker is not a big generator of tax revenue.

4. Portugal won't serve as Catalyst for sharing Players

For the past couple years we've been hearing that France, Italy and Spain have discussed sharing online poker liquidity. But up until now, nothing has been accomplished on this front. Assuming Portugal had come into the market with an intent to share players immediately, perhaps they could have facilitated further discussion on the matter. But now that they too are ring fencing players, it appears that we'll have to wait even longer for the European iPoker market to operate as a cohesive unit.

5. Portuguese Players miss out on a Great Opportunity

Perhaps the biggest losers of all from this decision are the actual Portuguese online poker players. Now, anybody who's a pro and/or looking for major tournament and cash-game action will be severely disappointed. The state of New Jersey (8.94m people) rarely sees guaranteed poker tournaments that go above $50,000. Without much liquidity in the market and no hope of expanding the player pool, Portuguese players can probably look forward to the same mid-ranged tournaments and cash games.