Betting on Brexit: How Leaving the EU Will Impact UK Online Gambling

Online gambling is at home in the United Kingdom. On one hand, it is the birthplace of the industry as a whole, with Microgaming – the company that claims to have launched the first fully functional online gambling destination in 1994 – having its HQ in the Isle of Man, one of the crown dependencies. On the other, it is home to some of the largest gaming companies in the world: Ladbrokes Coral, Paddy Power Betfair, William Hill, Bet365, 888, and many others. The UK is also one of the most lucrative markets for gambling operators: gambling is one of the most resilient industries in the country, with locals spending in excess of £3.6 billion (2015) on online gambling alone. How will the country’s exit from the European Union affect its gambling companies – and especially the tax revenues said companies (based in the UK) generate year after year?

Restricting the outsiders’ access

If the UK leaves the European Union, its online gambling market will most likely close up even more tightly than before. This means that operators like the 7 Sultans online casino will have little to no access to the UK gambling market. Their access to the UK market is already limited: the 7 Sultans operates under a license issued by the MGA (Malta Gaming Authority), which offers it automatic access to gaming markets in the EU unless the local laws override it – which is the case in the UK. Without a license issued by the UK Gaming Commission, the 7 Sultans and its likes will be shut out of the UK, and this situation will most likely be even worse after the UK finalises its exit from the European Union.

Local operators

Before the introduction of the Point of Consumption tax in 2014, UK players had access not only to casinos license in the UK but to those with licenses issued by the authorities of the Isle of Man, Alderney, Malta and Gibraltar. With the PoC Tax, this has changed – being licensed and taxed by the UKGC is mandatory for anyone willing to operate on the UK gaming market.

Gibraltar could be the most affected by Brexit. As a jurisdiction whitelisted by the UKGC, and with a more favourable tax regime than the UK itself, Gibraltar has become the home of over 30 major licensed gambling companies, including major UK-based companies like 32Red, 888, William Hill, Bet365, and many others. The gambling companies of Gibraltar employ over 10% of the country’s entire workforce. The territory has expressed its will to stay in the EU.

The industry as a whole

The uncertainty of the UK leaving the EU will cast the shadow of uncertainty on the gaming industry as a whole. Many of the biggest operators are already licensed in several jurisdictions, including the UK, which will make their stay in the post-Brexit country a certainty. There are, in turn, many unknown effects that we’ll only be able to see after the BREXIT indeed happens. And that’s still years away.

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