The Brexit, the exit of the United Kingdom from the European Union, has a big impact at all levels, and naturally with gambling as well. This has an impact not only in the European Union countries but also with all the countries doing business with the UK, as the legal agreements change with this exit.
It’s not only the exit from the EU, but also the likely exit from the European Economic Area (EEA), to which also belong Norway, Iceland and Liechtenstein. For this reason, gambling companies will have to suffer major changes and will have to restructure their business.
The existing legislation requires gambling operators, land-based or online, to be companies registered in the European Economic Area, something that the UK will stop being, and therefore the companies based in the UK (and Gibraltar) most likely will not follow the legal requirements to be a gambling provider.
A possible, or likely, the outcome will be that those companies will have to relocate to a country in the EEA or simply pass their license to a company operating in a country in that region. Similarly, the whole infrastructure of hardware and software has to be moved to an EEA country too.
Not only operators are impacted by this, but also gambling suppliers might have to renegotiate their gaming agreements, as the existing licenses are applied to EEA countries only.
We mention possible outcomes because it’s not excluded just yet that, despite leaving the EU, the UK or only Gibraltar continues to be a part of the EEA, and therefore making all this scenario go away.
It’s an uncertain situation by now, and negotiations are currently underway in order to reach agreements that make possible the continuity of the existing gambling agreements.
The gambling sector has a significant contribution to the UK and Gibraltar economy, so it’s important to understand what these changes will bring, and how new legislation can make a good transition.
If we take into consideration that in Gibraltar approximately 25% of the Gross Domestic Product comes from the gambling sector, we realize the economic impact Brexit has on the region.
Another question concerns the free circulation of people that will also come to an end. In this particular case, most likely the Spanish people working in Gibraltar will benefit from a possible agreement made Spain and the UK made to solve this question.
If the existing gambling legislation is relatively loose in what concerns online gambling, and will therefore not mean a big impact for the area, the registered companies in UK and Gibraltar will most likely lose the rights for their business, as we already mentioned above.
Taxation impact, workers’ rights, online legislation, consumer protections, including gambling addiction, are some aspects that were properly regulated and that with this change are now undefined.
The complete Brexit will only happen in 2019 or later, but meanwhile, it’s important that gambling companies and the countries involved to take action in order to create the conditions for a smooth transition.