Faire Attention, USA

July 5, 2013
CLARK.LAW

Online poker in France is in trouble, and the reasons serve as a cautionary tale to US states considering legalizing Internet gambling.  If we don’t learn from the mistakes of our European freres and soeurs, we are doomed to repeat them.
Revenues for licensed online poker operators in France fell by 14 percent in the first half of 2013.  The two main factors cited as reasons for the drop are (1) heavy taxation, and (2) limited player pools.
The proposals that have been put forth (and in some cases passed) in various US state legislatures suffer from the same shortcomings as the framework that is in place in France.   One reason online poker boomed so successfully around the world in the last decade was that the operators could charge only a minimal rake and still remain tremendously profitable.  Low overhead for gaming operators (including taxes) makes for a desirable and inviting scenario for players.  But if the governments get greedy and demand too much, overhead and rake goes up and player interest and operator revenues decline.
The low rake / low overhead cat is out of the bag.  The US players who are going to be the earliest and most frequent players are already accustomed to it.  Let’s hope our smart representatives will not overdo it and will allow operators to thrive by setting reasonable license fees and taxes for Internet gambling businesses.

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