As sick as you may be of hearing about Brexit, regardless of how you voted, there is no doubt that it will have an effect on many industries across the UK.
But I have been wondering how it may impact on online casinos and bookmakers.
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Betting and gambling is one of the UK’s biggest industries, worth billions every year.
While it is difficult to make predictions, especially with all the uncertainty around soft or hard Brexit plans, it’s highly likely that Brexit will result in changes for the country’s gambling industry.
In this article I will look at:
Will Brexit effect Gambling Regulations in the UK?
The internet gives us access to websites and businesses across the world.
But since 2014, any online betting company that wants to have players from the UK, must be licensed by the UK Gambling Commission. The safeguards and provisions the Commission demands, makes the UK the most regulated, and probably safest, market in the global gambling community.
Many online Casinos and Bookmakers that offer their services in the UK are already based abroad, sometimes for tax reasons, so there seems no reason why this situation would be changed by Brexit.
Will not being in the single market have an impact?
The European Single Market guarantees “the free movement of goods, capital, services and labour” across the European Union.
The idea being it promotes economic growth by making business between member countries easier.
So, UK-based bookmakers, and those in British Territories such as Gibraltar, have been able to attract customers from EU countries without any additional costs. And, of course, EU-based companies can also operate in the UK in the same way.
Whatever the outcome of the Brexit negotiations, it’s most likely that the Single Market will no longer be available in the UK.
UK betting companies that have relevant licenses in the EU should be able to continue to operate in those Countries. And vice versa. Naturally.
However, to avoid any potential additional tariffs or regulation, many UK companies are looking to open new offices in EU jurisdictions like Malta, while EU companies may find it simpler to open offices in the UK to keep their profiles high in this massive market.
One of the biggest potential Brexit headaches is the fate of Gibraltar in all this.
As a British Territory slap bang in the middle of Europe, Brexit could have a major effect on life in Gibraltar. And as it has become the home of many UK gambling companies, the knock-on effect for them may also be huge.
Around 60% of all online gambling goes through companies based in Gibraltar. Apparently Gambling contributes about 25% of Gibraltar’s Gross Domestic Product.
So, leaving the single Market could have a big impact here.
As mentioned above, they should have no problem continuing to offer their services in the UK. But the fact that employees who live in Spain and commute to Gibraltar may not be able to do so after Brexit – at least not so easily – could mean that these companies will struggle for employees. Or at least have to pay more to get them.
This could drive up costs whether through relocation or just increases in wages.
Could this have an effect on pay-outs to players to protect profits?
Will there be any change in Taxes on Gambling?
The UK government stopped claiming taxes from gamblers bets in 2004. There was undoubtably an increase in betting following this, fuelled also by the rise in online gambling.
It is unlikely that Brexit would affect this as it wasn’t an EU decision. There appears to be no reason why this would change.
However, its not clear if the UK could levy new taxes, or increased taxes, on gambling companies themselves. Especially on those based abroad. And as we have already mentioned, many online betting companies are based abroad in places like Malta.
Although some of these companies have massive revenues, their profits are a small percentage of the bets made. Even an increase in taxes of only a few percent could make them unprofitable and drive operators out-of-business.
This could mean less choice of online casinos and bookmakers for the UK players, who currently have hundreds to choose from.
Your favourite site could face the axe.
Will we see worse odds being offered?
As we have seen, Brexit could mean gambling providers are looking at increased costs due to opening new offices, paying more for employees and potentially in increased tax burdens.
The main way this could affect UK gamblers is in how these companies react to protect their profits.
The simplest way to do this may be to offer worse odds than normal or to change the pay-out rates of games.
As it stands most online slot games, for example, have a pay-out rate of around 95%. So, reducing this to around 90% would generate millions more for Casinos.
This, of course, would mean that the players had a reduced chance of winning. An increased chance of losing, depending on how you look at it.
It is already an expensive form of entertainment and it may be about to get more expensive.
Will we see less players or less spending?
Summary of Brexits impact on Online Gambling?
In summary, no one knows what Brexit’s full effects will be on the British gambling industry, or the UK economy as a whole. Especially as it is currently in a state of limbo.
It is highly unlikely that UK players will see much difference in their online gambling experience.
Some companies, especially the smaller ones based abroad, may not survive. However, there are plenty to choose from and more may be encouraged to start up.
You should certainly keep an eye open for any communications from your current favourite betting site.
I will be keeping a close watch on the situation and can keep you informed if you sign up for our newsletter or allow notifications from this site.
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