How Brexit could impact online gambling in the future

Published on July 4, 2016 in Industry News

Online gambling in the UK and EU after BrexitIn years to come the 23rd of June 2016 will be remembered as one of the most historic days in British history. This was the day the country voted against being a member of the European Union.

Leaving the EU could affect the regulation, gaming taxes and poker liquidity as operators could decide to relocate their business in or out of the EU. There will also be a major impact on the regulatory jurisdictions seeing as the UK is home to not 1, but 6 jurisdictions which regulate online gambling.

The law of the UK demands that all operators should pay a 15% point of consumption tax on all their revenues from UK customers. These customers pay in the same international liquidity pool as the rest of the world to have access to the largest tournament prizes available. Brexit has no immediate impact on this regulation or the sites where British players can play. 

Casinos such as Bet365 fall under EU online gambling regulations which specify that license applicants must be members of the EU or the European Economic Area. This could mean that Bet365 may have to reconsider its UK location. Since Britain has chosen to leave the EU, Bet365 is no longer inside the EU and EEA which means they might have to reconsider loyalties and move their headquarters to remain an EU online casino.

Serious implications

Gibraltar has benefited greatly from the new gambling laws instigated in 2005. In fact, it has become a European powerhouse of online gambling and plays host to some of the biggest names in online poker. Both Partypoker and 888poker run their online operations from Gibraltar along with 25 other poker rooms. Gibraltar has certain membership rights to free trade but it is not subject to other aspects of the EU treaties. With Brexit all the rights of access the Gibraltar-based operators have to EU markets are at risk of being ended. Although the risk is not huge or an immediate concern it is not small enough to dismiss without worry. 

Isle of Man is home to the PokerStars headquarters, one of the largest online poker cardrooms in the world, and has more national online gambling licenses than any other operator. With Brexit now official, PokerStars might have to relocate to a jurisdiction where they will have free access to the EU market.

There is an ongoing argument by supporters from both sides on whether the UK will benefit economically from leaving the EU. If there is a decline in economic conditions, then there could be a possible raise in gambling taxes. British players won’t be able to play at sites in some of the EU jurisdictions because the operators can’t afford two sets of gaming taxes. 
 

"Britain was the EU member most in favour of free trade, both within the EU and the rest of the world."

Now that they have left the EU there is speculation that the EU will become even more protectionist and that they could choose to segregate their poker market from the rest of the world.

The loss of Britain’s commitment to free trade could also have an impact on the decisions made by the EU Court of Justice in the near future. These decisions could leave segregated markets unchallenged. 

While none of the above-mentioned “threats” are immediate, they could have a very large impact on the future of gambling in the EU and Britain in the near future.