Remember Brexit? The British exit from the European union will have a global impact on the gambling community. Although Brexit isn’t set to take place until the British parliament approves Article 50 of the Lisbon Treaty, which is supposed to begin in March, it still won’t be finalized for another 2 years. Still, the UK online gambling industry is already starting to foresee some consequences of the exit.
The United Kingdom has been home to the world of online gambling since the beginning. The self-proclaimed first completely functional online gambling website, Microgaming, was launched in the UK in 1994. The UK also has some of the largest companies in online gambling such as Ladbrokes Coral, Paddy Power Betfair, Bet365. Having the first and the largest in internet gambling has created one of the most resilient industries in Europe and one of the most lucrative markets for gambling operators. Locals alone spent upwards of £3.6 billion in 2015 solely in internet gambling. Now with Brexit on the horizon, some changes are set to take place.
Firstly, it seems that Brexit will limit the access for foreign companies. It’s likely that when Britain leaves the European Union the market will stiffen up a bit and companies will have less access to the gambling market in the UK. Companies like One Casino Limited might find themselves in a tighter spot than they are currently in. They are already limited in the UK market, licensed by Malta Lotteries and Gaming Authority, they are allowed access to the gaming markets in the EU unless the local laws override that access. Which is the case with the United Kingdom where they need a license supplied by the UK Gaming Commission or risk being shut out entirely. After the UK finalizes its exit from the EU, this situation will likely worsen.
On the southern end of the Iberian Peninsula, the British Overseas Territory of Gibraltar has become a haven for internet gambling companies. In 2014 the UK introduced the Point of Consumption tax which limited the access that UK players had to casinos that weren’t licensed with the UK Gambling Commission. Gibraltar was already whitelisted by the UK Gambling Commission and had a much more favorable tax program in place. Since then, over 30 major gambling companies have appeared on the peninsula representing some of the largest online gambling companies in the world and employing over 10% of the country’s total workforce. Gibraltar might be sinking quickly into the ocean if Brexit has its projected effect.
Although Brexit is still years away, there are already leering warnings for the future of one of the most profitable markets in Europe. Many of the largest online gambling companies and casinos already have multiple licenses for different jurisdictions around the world. For them, this may only mean some licensing changes. For others and even for some of them, the largest factor is the uncertainty. There are still many unknown effects that Brexit will have on the world economy.