Whatever the outcome,there is no arguing that Brexit will change the British business landscape. Here’s how Brexit might impact the UK online gaming industry.
What Will Brexit Mean For Online Gambling?
Brexit is looming,and regardless of the outcome there is no arguing it is going to change the British business landscape dramatically. Seeing that betting and gambling is one of the UK’s biggest industries, there’s a lot of speculation around what will happen to the online gaming industry when the United Kingdom eventually leaves the European Union. While it is difficult to make predictions, it’s likely that Brexit will result in both positives and negatives for the country’s gambling industry.Here are some insights to possible effects Brexit will have on the online gambling industry in the UK.
No Expected Regulation Hurdles
The UK has the most heavily regulated gambling market in Europe, which means it’s unlikely for the country to run into regulation hurdles when leaving the EU. The laws and procedures already in place are expected continue to apply post-Brexit. And, thanks to the update to the gambling act in 2014, which requires all off-shore gambling brands to have a licence from the Gambling Commission, operators based abroad that still want to operate in the UK should be able to continue doing so without major problems.
The Question Of Gaming Tax
One of the biggest uncertainties surrounding Brexit is gaming tax.If the UK leaves the EU without a deal, it’s possible for the country to end up falling back on World Trade Organisation rules and regulations. A move away from the EU into the rulings of the WTO might create a barrier for companies outside the UK from being allowed to offer their services there. This could have all sorts of implications for the UK, including decisions around taxes. An update to gaming tax laws post Brexit might result in a number of gaming companies closing doors. This is likely, especially when considering the number of online operators that closed their doors to UK players in 2014, when consumption tax on gross profits increased from 1 percent to 15 percent.
The European Single Market guarantees the free movement of goods, capital, services and labour – it’s at the heart of everything good about the European Union. It fuels economic growth by making business easier. Thanks to the single market,many UK-based bookmakers, and those based in its jurisdictions such as Gibraltar, have been able to utilise the Single Market to sell their products or services in EU countries without any additional tariffs – just like EU-based companies can operate in the UK with no additional costs beyond standard taxes.Following Brexit it’s highly likely the Single Market will no longer be available in the UK. Although UK betting companies that have relevant licenses in the EU will continue to operate in those markets, just as most EU companies with UK licences will continue to operate here, additional restrictions may implemented. To avoid additional tariffs or regulation, many UK companies are now making the decision to open new offices in EU jurisdictions like Malta, while EU companies are following the same strategy, in effect splitting their businesses into separate entities.
Gibraltar Brexit And Employment
Perhaps one of the biggest question marks hanging over Britain regarding Brexit and the online gaming industry comes in the form of the British Overseas Territories, and Gibraltar in particular. Although the Rock is not part of the UK, this territory did participate in the referendum and will, by default, cease to be a part of the European Union upon the UK’s withdrawal.
Home to several major betting firms, the Rock has become the unofficial capital of the global online gaming industry. According to the territory’s commerce minister, Albert Isola, the online gaming sector accounts for around 25 percent of Gibraltar’s gross domestic product. Approximately 60 percent of all online gambling bets are taken by firms on Gibraltar.
Considering the industry’s sizeable contribution to the Rock’s economy, Gibraltar has recently reached a deal with the British government to guarantee access to the UK market for its online gaming sectors.Although this agreement has helped ease some of the key Brexit anxieties,Gibraltar is recommending that its gambling licensees make contingency plans for a Gibraltar Brexit. A hard Brexit could pose a major headache for the industry – one of the biggest concerns being the impact of a closed border on employment in the sector. Currently, about 13,000 people (of whom 8,000 are Spaniards)cross into Gibraltar to work each day. Post Brexit, people may no longer be able to move freely across the border, which means companies will no longer be able to take advantage of cheaper employment. This could not only potentially impact the UK’s economy,but might also increase operational costs.
Higher Costs And Poorer Odds
Aside from not having access to cheaper labour and having to absorb the costs involved with setting up new offices across borders,gaming companies might have to deal with new tax and trade agreements post Brexit too; and the financial effects of this could end up in the punter’s lap. Higher costs and lower profits could potentially translate into poorer odds, bonuses and promotions on the customers’ end, which could result in a loss of players. A loss of players, as well as job losses in the gambling industry, could have serious snowball effects on the gaming industry and Britain’s economy as a whole.
Ultimately, whether there is a soft or hard UK Brexit, no one knows for certain what will befall the UK online gaming industry. Although it’s likely that many gaming companies will set up new offices across borders, it’s safe to say that the customer experience will largely be unaffected. Barring a very bad no deal scenario, few gambling operators are likely to pull out of the UK or the EU, even if additional tariffs or taxes apply, simply because the industry is so profitable. At the end of the day only time will tell what Brexit’s full effects will be on the British gambling industry, and the economy as a whole.Health Games offers a new form of online casino that supports health-related good causes across Britain. Health Games is the only gaming site of its kind based in the UK. Sign up today and receive 22 free spins – no deposit required.