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GGNetwork, once unknown in the west, made a significant splash in the headlines last week.
Its flagship online poker skin, GGPoker, announced the signing of Daniel Negreanu as an ambassador on Wednesday.
The pickup is one in a series of moves calculated at expanding the network’s presence in the western world — and perhaps, eventually, the US.
The GG brand is likely unfamiliar to most American players. The company only came into existence after the federal government shut down the unregulated US online poker market on Black Friday.
GG spent its formative years focusing largely on China and neighboring markets.
In 2016, it began promoting Natural8 — its largest skin at the time — in Europe. It launched GGPoker the following year, its first exclusively English-language skin licensed by the UK Gambling Commission.
Since then, GG has grown quickly and steadily. It is now undeniably the second-largest international operator behind PokerStars.
One obvious question now is whether GGNetwork’s expansion will come to include the burgeoning US market.
Negreanu himself gave a partial answer to that question on Twitter when asked about the possibility.
GGNetwork will face two major challenges if it hopes to enter the US market.
Its history of regulatory compliance is a short one, and although it was never active in the US, it may be seen as a bad actor by some regulatory authorities. It has recently been taking steps to address that problem too.
Negreanu, of course, was the face of PokerStars for 12 years before stepping down from that position earlier in 2019. Despite the company parting ways with many big names in recent years, the loss of Negreanu still came as a shock.
For a while, it seemed that the site was simply eliminating redundancy. Negreanu’s global name recognition eclipsed that of the other pros who were leaving.
Perhaps it’s a signal that PokerStars no longer believes the marketing value of big-name pros is worth the investment. Liv Boeree and Igor Kurganov became the latest departures earlier this month.
Several former PokerStars ambassadors have subsequently ended up at partypoker, including the likes of Isaac Haxton, Kevin Martin and Jaime Staples. That was never likely to be the case for Negreanu, though.
He may be too expensive, for one thing, given how many other ambassadors the site currently pays.
More importantly, however, many of those sponsored players have heavily criticized Negreanu for his defense of controversial PokerStars policies. Integrating him into the team could be viewed as hypocritical by players displeased with Negreanu (and/or PokerStars).
So, although many were surprised when Negreanu announced that he was signing with GGPoker, perhaps they shouldn’t have been.
Kid Poker’s fame is such that he was never going to be out of a sponsorship deal for long. But if he wasn’t going to end up with partypoker, then where else could he have landed?
Negreanu is just the second ambassador on the GGPoker roster, joining American high-roller Bryn Kenney. As far as two-man lineups go, that’s a pretty impressive team. It also seems significant that both represent North America, while Natural8’s more expansive lineup is a mix of Asian and European pros.
Negreanu also balances Kenney nicely, creating a dichotomous personality at the heart of GGPoker’s identity.
GGNetwork is known for two things:
These two things appear somewhat contradictory. The anti-predation policy clearly aims at making the site safe and fun for recreational players, yet high rollers are meant to appeal to professionals.
The GGPoker skin and Kenney himself have been instrumental in developing the latter. Negreanu, on the other hand, is most popular with casual poker fans and has become a vocal advocate for protecting the low-stakes ecosystem.
As a pair, then, the two ambassadors reflect the two facets of GGNetwork’s approach to the game.
In the same week as the announcement of Negreanu’s signing, GGNetwork abruptly pulled out of 12 markets. The affected countries are mostly in Europe:
Natural8 ceased serving customers on that list immediately. GGPoker is reportedly still allowing existing customers to play but not accepting any new users from those countries. Presumably, it will eventually ask existing customers to withdraw their funds and suspend service to them.
The goal of the move, according to the head of GGPoker, Jean-Christophe Antoine, is to pursue the necessary licenses to operate in these markets legally. In its statement, Natural8 refers to “recent changes in gaming laws,” but many of the countries’ regulatory frameworks have been in place for years.
The Czech Republic, for instance, in 2017, asked operators to stop serving its citizens and apply for a license. Most complied, and PokerStars and partypoker have since received approval to operate legally in the country.
It’s not so much the laws that have changed, then, as GGNetwork’s eagerness to comply.
There are certainly good reasons to pursue a license in a country rather than operating outside the law. It makes payment processing easier, for starters, and means that you can advertise to the extent local laws permit. It also makes a brand more respectable and trustworthy.
Yet, the fact that GG is making the change in so many countries at once suggests that it’s not necessarily about the countries themselves. Rather, it’s a strategic shift in the company’s stance on regulation. The change comes at a time when many other online gambling entities are taking compliance more seriously.
One likely reason for that is that GG is eying up entry into the US market. And US regulators tend not to approve licenses for companies that have been non-compliant in other jurisdictions.
Partypoker, for instance, made a similar withdrawal from several gray markets a few months ago. Industry-watchers have speculated that doing so was likely a precondition for the company receiving a permit to operate in Pennsylvania. Its PA online poker application is still pending under the casino license of Valley Forge.
GGNetwork has not, at this point, applied for a license in Pennsylvania or any other legal US state. It’s not clear where it would find a way in at this point, even if it wanted to.
The only PA casino that (1) has a license for online poker and (2) does not have a partner in place is Wind Creek. That could be a possibility somewhere down the line, but options are even more scant elsewhere.
The New Jersey market is overcrowded as it is unlikely to appeal to new operators like GGNetwork.
Nevada, meanwhile, arguably has the strictest regulatory body of any state with legal online poker. PokerStars is not allowed to operate there, and GVC (which owns partypoker) barely squeaked by for its license.
GGNetwork would need to clean up its act further — and keep it clean for a period of years — before it could realistically hope for approval there.
More likely, though, what GGNetwork has its eye on is not the US online poker market as it exists today. Rather, it’s eyeing the potential US market that could exist a few years down the road.
No one knows for sure what the future will hold, but early returns from Pennsylvania seem to indicate big potential.
Cleaning up one’s corporate image also takes time. Ceasing black- or gray-market operations carries more regulatory weight once time has passed, compared to exiting immediately before applying for licensure.
GGNetwork is, no doubt, hoping that the success of PA online poker will motivate other states to follow suit. In the meantime, it’s working on building brand recognition with poker players and a reputation for corporate compliance with regard to regulators.
Even if the US market doesn’t expand as much as everyone hopes, these efforts may pay dividends in the existing European market.