Liquidity sharing in Europe has lost some of its charm as online poker revenue in Spain took a hit in the final third of 2019.
Published on Feb. 28, the latest official financial report highlighted a tough period for the local online gaming industry.
In addition to a 2 percent overall drop in revenue, poker suffered a quarterly and annual downswing.
Online Poker Revenue Losing Ground
Spain’s online gambling industry was regulated in 2011. Poker was initially segregated but a liquidity sharing pact with France, Italy and Portugal was agreed in 2017.
That deal came into effect on Jan. 1, 2018, and initially provided a boost for Spain’s online poker economy. However, two years on, it seems the initial spike has levelled out.
As per the Q4 report, poker revenue was down 2.14 percent compared to the previous quarter. The €20.04 million/$21.96 million taken was also 4 percent down on the same period in 2018.
A note on the report points to a downturn in tournament activity as the reason for a drop in revenue. However, the distribution of earnings mirrors also suggests consumer tastes are changing.
In Spain, online poker revenue represents 10.8 percent of the industry’s overall earnings. In contrast, sports betting and casino gaming contribute 48.48 percent and 38.96 percent, respectively. These dynamics mirror what’s happening at many of the top online gaming sites.
As an example, the latest financial report from PokerStars shows that sports betting and casino gaming contribute more to the business than poker.
Industry Dynamics Continue to Evolve
Online poker has long been third in the industry hierarchy. However, in recent years, the discrepancy between verticals has increased. These changes have resulted in more poker products being tailored to suit casino and sports betting fans.
Innovations such as PokerStars’ side bets are the most notable. However, across the industry, there’s been a clear push to increase poker activity through gambling-based products.
Concepts such as side bets may be the way to reverse Spain’s poker slump. Indeed, while sharing players with France et al proved positive in 2018, it’s not enough any longer.
If operators are going to negate a drop in tournament activity, they need to make cash games more attractive. Given that sports betting and casino games are big business in Spain, the use of gambling-based innovations could be the answer.
For now, Spain’s nine online poker sites will be hoping for a natural recovery. Despite the latest results, poker as a whole is still on a high. Last year saw offline tournament activity increase and the game gain traction in new regions, including Asia.
Success in one sector doesn’t necessarily translate into success in another. However, for Spain’s online poker community, there are positives to focus on, even in the face of a financial dip.