Seems like this would be very easy for them to block since they know your GPS coordinates. They could just pop up a message saying "Pokemon Go is not yet available in your region," although, the good will demonstrated by allowing customers in other countries to play would probably be better than arbitrarily blocking them.
They could. If they did, they'd probably kill the game on the spot, or at least significantly curtail its popularity. As it is right now, the game is a global phenomenon, and it's getting immensely popular worldwide.
