You Cheeky Hunt

July 13, 2011, Posted by Pokerfarm

Amid the Full Tilt Poker debacle, UK Culture secretary Jeremy Hunt has spooked British poker pros by promising to reform the way in which online poker rooms are regulated in UK markets. The fact that thousands of British poker players current have money deposited with Full Tilt and no clear way of getting it back has drawn media attention to the issue of British online gambling governance.

At the moment, offshore poker rooms are allowed to advertise in Britain without the oversight of the UK Gambling Commission, so long as they are regulated in an approved jurisdiction. Seeing as approved jurisdictions include places like Alderney, which has a population lower than a typical Las Vegas Casino, essentially it's a regulatory free-for-all. Pokerstars and FTP have spent millions of pounds advertising in UK markets, and you can scarcely watch British day-time TV without being bombarded with ads for online bingo sites and pay-day loan services (a potent combination, to be sure.)

A review of online gambling regulation was already in progress when Black Friday struck, and in its aftermath the Department for Culture, Media and Sport seems poised to change the rules for how online poker rooms are allowed to advertise and operate in the UK. It seems probable, at the very least, that the rules for which poker rooms are allowed to advertise to Brits will be tightened up.

The great concern for British poker players is that Hunt may seek a more substantial reform of online gambling. With tabloid newspapers like the Daily Mail bleating that "around a million children are addicted to gambling" in Britain, there's concern that Hunt may try to limit which rooms are allowed to accept British customers. In France, for example, only domestic, nationally-regulated rooms can serve the public. This system is bad for French players, who now suffer from reduced choice and a smaller poker economy, and even worse news for players everywhere else, who no longer get to play against French fish.

Underpinning worries over reform is the fact that presently, UK gambling winnings are tax exempt, even for professional poker players. British regs are worried that renewed scrutiny of online poker operations, however seemingly innocuous, may eventually lead to gambling profits become liable for some kind of tax in the future. As British pros would point out, betting is a firmly entrenched part of UK culture, and a tax on winnings would be wildly unpopular. Further, taxing winnings could potentially render losses tax-deductible. However, as the number of professional players in the UK grows, it is difficult to be confident that online poker will retain its tax-exempt status indefinitely.

In the world of internet poker, the balance between regulation and market freedom is difficult to strike. While poker room integrity is of paramount importance to professional players, governments and regulators generally have a poor record of understanding or preserving the differences between online poker and general recreational gambling. It speaks volumes that, even after perhaps the greatest crisis of confidence that has ever struck the online poker community, players remain deeply suspicious of government involvement.