Do We Know What’s Happening With Brexit And The Gambling Industry Yet?

European Flag with UK Missing It’s now been over a year since the UK ‘voted’ to leave the European Union. In all that time, we’ve come no closer to understanding what this will mean in any aspect of British life, let alone when it comes to the specifics of things like the gambling industry.

Way back in 1994, Britain became the first country to host a fully functional mobile casino, and since then has been at the heart of global online and mobile gambling. Yet, with Brexit on the horizon, there are question marks over what the break with the union will mean for online casino operators and players alike.


Soft Brexit vs Hard Brexit

Hard Brexit vs Soft Brexit You may have heard the terms ‘Soft Brexit’ and ‘Hard Brexit’ bandied around by politicians and commentators, and while it’s not always clear what they mean, the distinction is an important one for the industry.

If there is a soft Brexit, which takes place over many months or even years and gives space for policy makers to decide on new legislation for all different industries, the online gambling industry will have plenty of time to adjust to the change, and make the necessary changes to their own way of working to accommodate the break.

If, however, we’re heading for a hard Brexit, where things happen suddenly and we don’t have time to adjust, that could spell catastrophe, not just for the gambling sector, but for the UK in general. What would EU operators with UK players or UK operators with EU players do? So many EU laws currently govern the industry that there would be a sudden legislative vacuum and operators and players could all be at risk.


Learning From History

Place of Consumption TaxAre there any precedents we can learn from? Well not really, seeing as no country – let alone one with an online gambling industry the size of the UK’s – has ever left the EU before. So, there’s very little telling what the short and long terms affects will be. However, there are a couple of other shifts in legislation that might indicate that there are choppy waters ahead for the industry.

The last big bit of Britain only legislation that really caused waves in the online and mobile gambling industry was the 2014 introduction of a place of consumption tax. The tax required those operators based outside the UK but operating within it to pay a 15% flat rate of tax on all income they made from British players. The aim was to prevent companies based in tax havens from taking too much money out of the UK economy without putting back into it.

The effects of the place of consumption tax were pretty devastating for many operators. Many couldn’t afford the tax so simply withdrew from the British market, while others made the costly transition to become fully UK based companies. These extra costs were, of course, passed on to players, with smaller bonuses or more restrictions on bonuses and lower overall RTP rates. We don’t know exactly what will happen after Brexit, but it seems pretty likely we’ll see some repeat of this.

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