PokerStars recently emailed players located in China, Macau, and Taiwan. The email warned that Stars would be pulling out of those jurisdictions on the 1st of September 2020.
The email was brusque and efficient: “Please be informed that as of the 1st of September we’ll be exiting China, Taiwan, and Macau.”
It then listed the adjustments to withdrawal procedures.
Bankroll withdrawals are still possible. In fact, Stars have promised to make withdrawals easier. Various changes have been made to enable players to clear their accounts ASAP. For example, lowered withdrawal limits.
However, players from these locations will not be able to join tables or place wagers.
This represents a rather disappointing reversal in the rise of East Asia as a poker market.
Make paper, tigers
The rise of China is a hot talking point. In the last few years the junket businesses discovered online poker. And they've been selling it hard to their pods of whales.
Sites like 888 Poker were marketing to China, even as they dominated the sponsorship of the WSOP in 2017. And other sites like Natural8 have made the Chinese market a cornerstone of their business.
So there were plenty of ways to play online poker in China. Regardless of the game's illegality.
Many of us viewed this rise with hope. For years, China seemed so unconcerned with plugging the holes in the iron firewall. Perhaps that presaged legalization, bringing with it another billion and a half potential players.
That hope looked increasingly forlorn earlier this year when China announced a crackdown on online gambling. It looked still more forlorn when they followed through. They shut down Macanese junkets. They pulled the drawstrings tight about the Forex. And they went after online players and home games.
Now it looks like Stars are bowing to the law, and bowing out of China.
PRC v. ROC
The exit from Taiwan is most likely motivated by similar concerns. Though Taiwan’s online poker exists in a much greyer area than China.
The law in Taiwan prohibits player-to-player gambling but doesn’t specify whether online games count. That is soft sand to build your hopes on, but it has been enough for Stars until now.
Some people have suggested that this might be a case of treating Taiwan as if it were a part of China. The status of Taiwan on the world stage is infamously complicated by Chinese claims that it is a part of the PRC.
For organisations like PokerStars, acknowledging that Taiwan is an independent country sometimes comes with pressure to recant from China.
In reality, the exit from Taiwan is probably a sop to the Maltese regulators rather than to the CCP. The whole event has the look of Stars wanting to tidy up their Anti-Money Laundering and Know Your Client materials. Perhaps this is ahead of applying for US licenses.
Macau on the other hand has the opposite problem to China and Taiwan, in that Macau does not regulate online poker at all. This is a Wild East situation that Stars may want to remove themselves from to avoid reputational damage.
Just the tip
Although this looks like good news for GGPoker's market share, it is worth noting that Stars are not as out of these markets as they might look.
So, this could be a case of Stars having their cake and eating it. The bans only seem to apply to PokerStars sites at the moment. They do not apply to PokerStars skins like 6up.
6up is specialized to the Chinese market. And does most of its business in those tricky waters. If you still see players with the five-starred flag by their name on Stars, they are probably playing through the 6up skin now.
The whole kerfuffle could wind up being a win-win for Stars. They unload the difficulties of tracking Chinese, Macanese, and Taiwanese law to a company that deals with these markets regularly, while removing their own liability and the administrative burden related to keeping those players on.
It will be interesting to see if other sites follow suit or if this represents just a blip in China’s growing importance to the poker world. Either way, this could mark a major shift in the online poker landscape.
