iGaming Operators Continue Exodus From International Grey Markets

A new UK law requiring online operators to all but withdraw from grey markets, as well as the lure of the USA’s newly regulated online gambling industry, is starting to have a profound effect on the policies of a number of major companies in the business. Last week, for instance, the Amaya Gaming owned sites of PokerStars and Full Tilt Poker withdrew from more than 30 countries across the globe, and this week the Amaya owned OnGame Poker Network also followed suit.
In addition, major operators such as Betsson, Poker Heaven, Paf, RedKings and RedBet, have pulled out of similar markets across Africa, Asia and the Middle East, while PKR has announced its withdrawal from Italy, and Bet365 from Romania.
This mass exodus from grey market jurisdictions is seen by online operators as a way of trying to satisfy the demands of regulated countries so as to not be excluded from their lucrative markets. Last year, for instance, the UK accounted for 8% of the global online gambling industry and so exiting from unregulated market  is now being seen as a shrewd business decision. As PokerStars Head of Corp Communications, Eric Hollreiser, tweeted recently:
“Re Qs about our withdrawal from some markets: This action aligns PokerStars and Full Tilt with Amaya’s global market policies. These markets represent a tiny fraction of our global revenues and our global customer base.”
The decision to pull out of certain unregulated markets, however, isn’t so clear cut for other operators, including Bet365 which last year generated around half its £1.3 billion revenues from grey markets, such as China. In the absence of extradition treaties with Western countries, the Chinese authorities, instead, have been focusing its efforts on going after Chinese residents flaunting gaming laws, including jailing four men in Jiangxi province for gambling on bet365’s web site, or sending to prison two men in Zhejiang for advertising bet365 on their blogs.
In the meanwhile, there is little pressure on Bet365 itself to alter its approach, and as a company statement explained, recently:
“There is no legislation that expressly prohibits the supply of remote gambling services into China by operators who are based outside China. Bet365 has no people, assets or infrastructure in China and does not engage any agent, aggregators or intermediaries, for any purpose, in China. In the view of bet365 and its lawyers, Chinese law does not extend to the provision of services into China by gambling operators and service providers who themselves have no nexus with the territory. Any allegation of illegality on the part of bet 365 is therefore untrue.”