Ever since the UK voted to leave the European Union in June 2016, there has been much discussion as to what effect this will have on various UK industries, including the online gambling industry. Many fear that UK gambling will be negatively impacted by Brexit, leading to job losses and higher costs for players, but although it has been more than 3 years since the vote, most of us seem to be none the wiser as to what to expect.
With uncertainties surrounding the future of UK gambling legislation and taxes in a post-Brexit world, there are questions as to how the industry will be affected. What will Brexit mean for online casinos and players alike?
What will this mean for businesses?
From a business point of view, one of the largest concerns centres around Gibraltar. For a number of years, Gibraltar has been an attractive hub for online gambling companies, but the security of the sector has been thrown into doubt following the Brexit vote. While Gibraltar remains part of the EU, the EU gambling regulations will apply to casino sites based there, but if the rights afforded to them under these rules are lost when the UK breaks from the EU, it could lead to many of these companies feeling they have no other choice but to relocate to another EU state.
Some big-name gambling operators have already moved their main operations to Malta (which boast beneficial gaming laws) citing the need to maintain European Market access. The government of Gibraltar has been trying to assure companies that it will be business as usual after the UK exits the EU, but with so much uncertainty surrounding the deal, and continuing concerns that the UK will crash out of the EU with no deal, some online gambling operators may view staying in Gibraltar as too risky.
Following 2014 legislation, overseas online slot sites are now required to apply for a gambling licence from the United Kingdom Gambling Commission (UKGC). There is uncertainty as to whether the current arrangements will remain the same after Brexit. And it’s not just licencing that is raising concerns, tax will also become an issue. If the UK leaves the EU without an agreement, they will automatically default to World Trade Organization (WTO) rules and regulations, which could prove to be prohibitive for many online gambling companies, leading them to pull out of the UK market altogether. This could work the other way too, with UK-based gambling companies no longer having access to EU markets on the same advantageous terms as they currently enjoy.
The big winner in this is likely to be Malta, with an exodus of UK/Gibraltar-based gambling operators expected to move to the island if no formal agreements regarding UK gambling law are put in place after the UK leaves the EU. At present, Malta and Gibraltar are comparably attractive to online casinos, but that could soon change, giving Malta the upper hand as a gambling jurisdiction that is also based in the EU.
None of these scenarios is a given, though. The British, Spanish and Gibraltar governments remain in talks in an effort to resolve any issues that might arise from a no-deal Brexit, while the future of Brexit itself remains uncertain.
What will this mean for players?
Another concern is how Brexit will impact UK players. With the possibility that overseas gambling companies will now find it more difficult to obtain a UK gambling licence, the worry is that players in the UK will lose access to some online casinos. Also, if gambling providers are required to pay higher rates of tax to operate in the UK, and companies have to pay to relocate their offices, this may result in increased costs for consumers in the form of lower odds and fewer bonuses and promotions on offer.
The UK gambling sector is a competitive market, which is good news for players as it means online casinos often give players generous welcome offers and other bonuses in an attempt to outcompete their rivals. However, if fewer gambling providers have access to the UK market post-Brexit, this advantage could shift. Given that gambling is such a profitable sector in the UK, though, companies will not want to jeopardise that and therefore players are unlikely to experience a dramatic change in their online gambling experience.
Currently, the UK gambling industry is doing well, bringing in over £15 billion every year, with online gambling alone having reached £4 billion in 2017. This puts the UK it in a strong position when facing any Brexit storms, and whatever the outcome of Brexit, the EU is unlikely to turn its back on such a lucrative market. Much of the discussion over what effect leaving the EU will have on the UK gambling industry remains theoretical. Ultimately, only time will tell.