The UK leaving the EU will have a dramatic impact on many aspects of life for people living both in the UK and in Europe.
One area that will be impacted but that has been under reported is on the impact on online gaming and gambling.
We are seeing a plethora of new online casinos in 2020, but how will these businesses be affected by Brexit? UK gaming companies make more money than any other country in the world, so it stands to reason that the industry will be concerned about the impact. Here’s what you need to know:
The good news is that, unlike so many other industries, gambling is not centrally regulated by the EU.
Instead, each country is responsible for setting its own laws, regulations and licensing policies.
From the point of view of Brexit, this should be taken as a positive: it means that betting and gambling fans using online casinos and other gambling services are unlikely to notice any change at all, particularly if the services you use are operated outside of the UK.
For the bookmakers and casino owners running these services, however, there may be some noticeable changes.
Initially, they will need to choose which country they want to base their operations from, as they will be subject to the regulations of that country.
As a result, it is likely that many online casinos will choose the move their operations from UK jurisdictions such as Gibraltar to EU gambling hubs such as Malta.
The cost of making these operational changes is likely to be passed on to their site users, meaning that online gamblers might find that some of their favourite sites increase their prices slightly (however other may take this as an opportunity to reduce costs and attract new customers).
Online Gambling in the UK
The online gambling industry in the UK is incredibly healthy. Last year the Total gross gambling yield (GGY) of the UK gambling industry was an incredible £14.4 billion.
Of that figure, 37% can be attributed to the remote, online gambling sector. Because the industry has such an incredible wealth of resources, it means that they are fully equipped to deal with Brexit, and many companies will have already invested significant resources in ensuring that their business continues to operate seamlessly as the UK transitions less seamlessly from EU membership to going it alone.
The UK has always been free to move its taxes from the gambling industry up and down, and it is likely this will continue unabated after Brexit. But it could well be that these rates of taxation vary depending on where in the world the company offering the gambling services is based:
Understanding the Single Market
The single market sits at the crux of the EU and of EU membership. This means that the EU can be viewed as a single entity, as though it has no border: in theory this should remove any obstacles to the way that goods and services move, making it more efficient.
But by removing themselves from the EU, the UK has also removed itself from the single market. This may mean that additional restrictions will be placed on EU countries that choose to offer their gambling services in the UK.
They may find that they are subjected to higher taxation rates, for example, although this has not been formally mentioned by the UK government at this stage.
Know Your Customer
Finally, many within the gambling industry are wondering how Brexit will affect the UK’s attitudes to the KYC (Know your Customer) legislation.
Established by the EU, this legislation requires that all online casinos take some basic details from their customers in a bid to prevent fraud, money laundering and other financial crime.
Will the UK loosen the rules surrounding this, maintain the status quo, or will they become more stringent? This would make gambling in the UK more attractive to certain people and could increase the revenue they can gain from taxation, which will be atractive to the UK government who are facing a colossal Brexit divorce bill. Only time will tell what path this guides them down with their gambling legislation.