BUSINESS

Why is Entraction moving on?

TAGs: Entraction, IGT

entraction igtEverything was all fine and dandy for service provider Entraction’s customers up until late last week. They were feeling more stable than they had at this point the year previous thanks to the firm being acquired by International Game Technology (IGT). That may have been where the trouble started for customers of the firm. It comes after the latest news from the Swedish firm that it won’t be allowing players from five different countries as of September 29th.

Those five countries are Canada, Israel, Russia, Norway and Turkey with the news originally being reported by affiliate site Donkr. We contacted International Game Technology and Entraction for comment but neither had replied by the time this article went to press.

In order to understand why they have chosen to pull out it’s worth first considering comments made in the past by Entraction president and CEO Peter Astrom. When the Swedes released their results back in May the chief used the update to explain that Black Friday had strengthened “Entraction’s opportunities for success when the US market opens.” That has added fuel to a fire that points to the acquisition by IGT being firmly focused on the success in the US.

In the sense that they’re looking to make an assault on any US market regulation their priority, the company will come under increasing scrutiny for their operations elsewhere. What of the random selection of five countries that have been chosen as Entraction’s scape goats?

It’s straight away easy to see why they decided to pull out of some territories. Israel has made its feelings known towards the online gambling industry. Last month, the country’s Knesset included the “scourge of online gambling” in a critique of Israel’s public services. Injunctions were earlier sent out to ISPs letting sites operate something that wouldn’t look good in the eyes of the US.

You only have to look at Sportingbet’s frantic dash to get rid of their Turkish operations to see the state of that market. Sports betting was outlawed in 2007 for everyone except the state’s monopoly. Norway adopted strict online gambling industry regulations similar to the US’s UIGEA with payments being banned. This had little effect on the country’s gamblers as around 300,000 still openly play online poker on sites such as Betsson – one that ran on Entraction’s network. The country is now considering ISP blocking.

Russia has repeatedly tightened its laws on the online gambling industry and you can imagine that it won’t be long until they start locking online gaming company staff and players in gulags and throwing away the key. The odd one out amongst the five though is Canada.

As far as CalvinAyre.com understands, it has never been made illegal for international companies to allow Canadians to open accounts at their sites. This would make the decision by Entraction seem a little strange to say the least.

In our opinion, the decision by Entraction will have been largely motivated by the fact that it’s part of a larger public gaming company with eyes on the US – IGT. Acquiring Entraction was one of the early steps on the way to IGT breaking into the US market when it sees any regulation. The fact that they’re publicly traded means they are more and more limited elsewhere hence the closing down of operations in a number of different places. Add into the mixer the fact that Asia will be even further away if they’re public and you can see why at CalvinAyre.com we think that a private model is the far better model in the online gambling industry.

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