What Can Operators Expect From Brexit Changes?

While the UK Government deliberates over Brexit, there are a number of certainties for the gambling industry, and it’s not all good news.

Regulatory changes

The UK Gambling Commission (UKGC) has already produced some tough talk this year. We’re talking record fines, new ways to protect vulnerable customers and a streamlined complaints structure.

Still, regulations could change dramatically.

There has been much talk about a “backstop” – specifically for the border between the Republic of Ireland and Northern Ireland to remain “open” for frictionless trade – that the UK may have to adopt if trade talks are not completed by 2020.

But until then it is expected for regulations to stay roughly the same. But with the UKGC coming down hard on operators that break the rules, there might be more fines on the horizon.

Gaming tax

Next, the gaming tax will come into question. Considering a number of online operators closed their doors to UK players when tax laws changed back in 2014, Brexit might result in even more doors closing if there is an update to gaming tax laws. More restrictive regulations could lead to more withdrawals from the British market.

When it comes to tournaments, some operators are worried that fewer players from overseas could result in a much smaller winnings pot, especially when it comes to poker liquidity.

Gibraltar

Other British territories located outside mainland UK could take a hard hit from Brexit. These include the Isle of Man and Gibraltar, both of which are home to big iGaming market players such as 888 Holdings and PartyPoker (Gibraltar) and PokerStars (Isle of Man).

Taking matters into its own hands, Gibraltar has launched a range of measures aimed at preventing gambling companies moving to Malta once Brexit has occurred.

Bet365 and 888 have already announced their intention to relocate some of their operations to Malta, with the UK set to leave the European Union on 29 March 2019.

Spain has reassured its neighbor there will be no drastic changes once Brexit is put in place. If an exit deal is struck between the UK and the EU, there is a political agreement between Spain and Gibraltar that things will stay somewhat the same.

Regardless of location, all gambling companies operating in Great Britain will be affected by the planned increase in remote betting tax to 21% in October 2019, as confirmed by Philip Hammond, Chancellor of the Exchequer, in the latest budget.

Gambling industry

The UK gambling industry continues to flourish, regardless of the risks of Brexit. This can be seen in the rise of casino attendance in the UK as well as in the revenue of the UK’s different gambling sectors. According to industry statistics released by the Gambling Commission, the total gross gambling yield of the British gambling industry from October 2016 to October 2017 was £13.9 billion, a 0.7% increase from the period April 2016 – March 2017.

FOBTs

But it is fixed odds betting terminals that really dominate the headlines, with news today that the UK government has climbed down over a delay to the implementation of the new £2 maximum stake. After the resignation of former sports minister, Tracey Crouch, and the revelation that critical statistics could be flawed, prime minister Theresa May finally confirmed today that the rollout in April would go ahead. It is believed to cost bookmakers around £900m, a lot of which would have ended up in the Treasury coffers.

Now that Brexit decisions are starting to make a little more sense, certainly the key issue will be whether European licensing remains the same. Or will the regulatory changes of the UK and other countries such as Italy push other EU countries into more stringent measures? This will undoubtedly be the question on regulators’ lips.

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