How will Brexit affect the UK gambling industry?

  • Will Brexit change current gaming laws in the UK?
  • Online gaming most likely to be hit by Brexit
  • Freedom of movement could affect people working in the gaming industry

As the aftershocks of the Brexit vote continue to dominate the news agenda, what changes can the UK casino and gaming industry expect to see as the country exits the European Union?

Brexit EU referendum flag

It is now fairly certain that Article 50 will be triggered at the end of March, after the large majority vote in the House of Commons, following last year’s referendum. But what will Brexit do to change the current gaming laws in the UK and Gibraltar?

The gaming sector is a significant contributor to the economies of the UK and Gibraltar, so it is imperative for companies to be clued up on the changes to legislation that could potentially occur.

In summary, operators should not be too worried in a business sense by Brexit. However, there are risks that could impact on the profits of UK businesses. Most of the issues with Brexit that concern online gaming legislation are procedural, and should be solved.

For example, Gibraltar’s economy relies heavily on the industry. It’s predicted that 20-25% of Gibraltar’s overall GDP is thanks to gambling. Even though as a whole, Gibraltar overwhelmingly voted to remain in the EU last year, the territory is bound to the overall UK result, which voted to leave by 52% to 48%. Gibraltar, barring a miracle, will be leaving the EU. One potential problem with the situation is the freedom of movement for those in Spain who work in the gaming industry, and commute to Gibraltar daily. This is likely, however, to be agreed with the British and the Spanish governments, on a separate arrangement and timescale to Brexit.

Boris Johnson Brexit

But what about actual legislation? The current legal framework concerning gaming in the EU is fairly loose. Different nations are allowed a lot of autonomy in this area. Nations like the UK operate on a license-based framework, allowing quite a lot of freedom. There is no official EU-wide legislation that affects all members, with regards to the gaming sector, therefore, it’s unlikely Brexit will affect a lot of online gaming legislation for UK operators, which is a relief to business, as it’s mostly controlled by the UK government.

With little to worry about licensing, it must be said however, that there are risks when it comes to Brexit that could affect UK and Gibraltar registered gambling companies. It has recently been announced that the House of Commons will be voting on membership of the EEA (European Economic Area) as part of Brexit negotiations.

The current uncertainty means that if the UK leaves, it will be harder for operators to assert their rights as businesses. By leaving the EEA, it could impact on taxation rights and workers’ rights that were once in place. So it is important for businesses to watch developments in that area closely, in order to react to any potential change.

Brexit Scrabble

European cross-border co-operation in online gaming legislation is another aspect that might change, but not necessarily a great deal. Articles 49 and 56 of the TFEU (Treaty of the Functioning of the EU) allow freedoms and protections for the consumer, including important issues like preventing gambling addiction. The UK and Gibraltar will likely leave this treaty following Brexit, however these rights are also similarly decreed by organisations like the World Trade Organisation, which has no connection to the EU, therefore it is unlikely that legislation that prevents crimes like money laundering, will be affected.

For the time being, since a full Brexit is not expected until at least 2019, it is important for online gambling businesses to be up to date to any changes in legislation. Although, because a lot of legislation is not directly tied to the EU, do not expect a large reform and change to the gaming sector post-Brexit.

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