When David Cameron came up with the idea of holding a referendum on whether Britain should remain or exit the European Union, he didn’t expect this outcome. The financial markets were in turmoil in anticipation of the Brexit vote and the polls fluctuated widely over the last couple of weeks. Even though the numbers were indicating the fact that Britain will choose not to leave the European Union, the opposite happened.
The country voted by a substantial margin to pursue a future alone and ventured into uncharted waters. Now that the wheels are set in motion and the Prime Minister has announced his resignation, politicians and pundits try to come up with answers for sensitive questions. The impact of the Brexit vote will be, for better or worse, significant and there is a great degree of uncertainty. Most industries will be affected, some more than the others and people on both sides of the English Channel are rightfully concerned.
Testing Times for the iGaming Industry
Right now very few people are concerned about the impact of the Brexit vote on the gambling industry. There are obviously more pressing matters to solve, but online casinos, poker rooms and bookmakers could have good reasons to be worried. The UK serves as headquarters to six distinct jurisdictions, all of them regulating the online gambling industry. The UKGC, Gibraltar and the Isle of Man carry more weight, as some of the biggest gambling operators are located here.
At a first glance, UK residents don’t have much to worry about, since the UK has always been a model of success when it came to the regulatory regime. The thing is that while the same laws will be applicable to British people, some of the casinos, bookmakers and poker rooms might move out.
An Exodus of UK Headquartered Online Gambling Operators
Bet365 is one of the gambling operators who chose to keep its corporate headquarters in England. With many of their customers residing in the European Union, they contemplate the possibility of moving their base of operations. One of the consequences of the Brexit vote is that Britain will leave the European Union and probably the European Economic Area. EU online gambling regulations require online casinos to be members of one of these two entities to serve European customers.
Many casinos have already left United Kingdom to avoid the high taxes and the Exodus is expected to pick up speed. PokerStars is one of the industry giants that have at least a division licensed in the Isle of Man. If they lose access to the EU markets it is very likely that the relatively low taxes they pay here won’t be enough to offset the shortcomings. The company might choose to relocate to Malta where they can enjoy the best of both worlds.
In the end, these are all just very early forecasts and only time will tell how the Brexit will impact iGaming; here's hoping that the results will be positive and not the other way around.