Brexit is already a reality, and the gambling sector felt its most significant impact. The United Kingdom formally left the European Union on 31st January 2020. But, there are still a few sectors that need real attention from both sides. One of them remains the gambling sectors whose future after this Brexit decision is quite uncertain.
The UK’s gambling industry is estimated to be around £15 billion annually, and over 100,000 people are employed. The reports state that gambling operators contribute the tax revenue of approximately £700 million to the country’s economy. On an estimate, gambling accounts for almost 0.5% of the GDP or Gross Domestic product of the country.
Insider’s View on Effect of Brexit over Gambling Sector
The Brexit process was first initiated on 23rd June 2016 when the UK electorate voted by a proportion of 52%:48% to leave the EU (European Union). A few conditions needed to be settled, and several more were erupting during David Cameron’s reign.
Again, the process started on 29th March 2017 for Brexit that was about to impact not only other trades but the gambling industry at large. New PM Theresa May clearly stated, “Brexit means Brexit” with no intention of backing up on the process.
It gave a blow to the UK’s gambling industry, and with Brexit voting, the British Currency also fell to historic lows. Even economic difficulties were projected during this time as soon as the UK left the EU. But, a few reports stated that with Brexit, the UK-based gamblers would become loyal to UK gambling brands, and this can be seen as a support.
A report by Casino Guardian stated that the formation of Brexit might hurt the country’s gambling sector in the upcoming years, and the economy of the UK will feel its blow. This exit will bring some significant problems for all the industrial sectors. Along with Brexit, the executives stated that now the gambling industry is feeling the hardest blow because of COVID-19. Both these issues have put a lot of strain on the gambling industry overall.
Not only this, but the post-Brexit scene meetings and reports are still under discussion. The transition phase is still going on, and the implementation of the regulations will begin after Brexit Day and end by 31st December 2020. During this year, the UK may follow all the regulations set by the EU, and trading relations will remain unaffected. The future scenario is still unresolved and complicated. Nothing can be predicted at this time, but the UK’s economy is going to witness the change.
Position of Online Gambling Sector and Gibraltar Gambling Industry
Gambling in the UK attracts foreign tourists that make this sector one of the promising and growing ones. With pandemic and Brexit reigning over the UK, the gambling sectors, especially the online gambling sites, may feel the hardship. Many large gambling brands have customers from the EU, which they have to miss because of changed regulations. Everything now depends upon the country’s changed regulations after post-Brexit. On the contrary, if the two countries do not agree on its trade policies, then the scene may become different. In this situation, the gambling brands based in the UK will make sure that their services and online gambling tax paid are all in line with the World Trade Organization’s policies.
An official source said that the gambling structure of the UK is complex, as the independent jurisdictions regulate most of its parts. The UK Gambling Commission foresees the working of the gambling sector in the UK. Whereas, a few independent regulatory bodies like Gibraltar Regulatory Authority, IoM or the Gambling Supervision Commission, the Alderney Gambling Control Commission, the Jersey Gambling Commission, and the Guernsey Gambling Control Commission regulate the gambling procedures in each of the overseas territories.
There may be instances where if the operator needs to offer services to British customers, then they have to take a license from UKGC and pay a 15% point-of-consumption tax. Here, if the British customers are used to playing with EU-based online gambling sites, then changed regulations will make their betting experience rough.
According to the experts, the worst possible scenario post-Brexit can be the EU-based gambling brands after changed regulations may shut their services entirely for British gamblers.
On the other hand, the position of the Gibraltar Gambling market is in the lurch. If Brexit prevails, then long-term relationships between operators and Gibraltar have to end. The territory is known for its flexible taxation laws. A negative impact will be witnessed on its GDP too. Moreover, Gibraltar is stated to be the main discussion point of EU negotiations with Spain.
But, for the time being, Gibraltar will provide the Gambling services with the contingency arrangements if, in any case, there is no progress reach in the dialogue between two nations. The gambling operations may move to Malta, and due to this, the most significant British Gambling firm “bet365” has moved its gambling operations to Malta to tap the EU market. Analysts state that other operators may do the same in the wake of Brexit.