Major Poker Cardroom Leaving China, Taiwan, and Macau to Avoid Illegal Play3 weeks ago
One of the most prolific names in real money online poker play will allegedly be leaving China, Taiwan, and Macau. Users posting in the 2+2 online forum for poker players posted screenshots of messages from the Stars Support team for PokerStars, the online poker cardroom that takes up over two-thirds of the online poker market, saying they would be withdrawing from those markets specifically by September 1st.
This message may not be a surprise for those familiar with the history of The Stars Group and the current economic shift away from gambling in China. For PokerStars’ new parent company, Flutter Entertainment, “switching off” markets that fall outside of its compliance standards is simply part of the plan.
E-mails sent to those who would be affected by the exit from Chinese and Taiwanese markets encouraged players to withdraw their funds, including details about the change in banking rules like withdrawal minimums and options so that customers could retrieve any deposits or winnings. This isn’t the first time this year PokerStars has quickly left a specific jurisdiction, and it wouldn’t be the last: in May the online cardroom fled Cyprus and on September 10th, it similarly left Serbia.
The decision to pull the online poker giant from these markets is hardly random. A recent merger of The Stars Group put PokerStars in the hands of Flutter Entertainment, an event that seems to be the catalyst for the retreat from more legally gray markets.
New Control and a Tight Grip
Another industry giant, Flutter Entertainment acquired PokerStars in May 2020 with the TSG merger, but only recently made its intentions to commit to more strict compliance standards official. Previously, in places like China where gambling is illegal, PokerStars was able to profit off of an unofficial stance on online gambling. Now, the Chinese government is cracking down--not just on black market gambling but on new forms of gambling that hadn’t been regulated yet.
Under Flutter, PokerStars is leaving a market that is rapidly adjusting and probably avoiding much larger problems in the future. The Stars Group had a bit of a reputation for dabbling in these types of situations, sometimes with disastrous outcomes.
A Troubled Past
The Russian market is not dissimilar to China in that gambling is largely banned and there is a considerable black market for the pastime. Off-shore operators are popular for this reason and PokerStars is part of the online gambling trend. Russian authorities have attempted to prevent TSG from operating in the past by adding them to a payment processing blacklist, but that only made TSG CEO Rafi Ashkenazi respond with boasts about how well the company evaded their efforts.
Now, under Flutter Entertainment’s lead, PokerStars is withdrawing from markets like these instead of taunting them, but they are still hesitant to pull from Russia. The customer base is much larger than the ones in China, Taiwan, or Cyprus and would be a more substantial loss.
However, they need to avoid missteps like the ones made in the United States when the company was still under the name Amaya. Online gambling laws are still complex in the US and many out-of-country sites, like Betsafe online casino for example, are still inaccessible. PokerStars founder Isai Scheinberg ended up with federal charges and millions owed in payouts, losing PokerStars the US market for years. This may be part of why Flutter Entertainment is treading lightly as they accelerate strategic removals and attempt to redeem PokerStars, but are they treading lightly enough?
Moving to a Different Market
Even as Flutter retires from certain jurisdictions, there are big plans for the company to re-enter old territory. A partnership with Fox Sports allowed The Stars Group to get a piece of the rapidly growing sports betting pie in the US in 2019, before their merger with one of the largest names in sports betting in the UK.
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