How Brexit Will Affect UK Casino Industry

There are certain conditions that need to avail themselves before any business, action and even natural occurrences can thrive. For instance, a plant needs carbon dioxide, water, and optimum temperatures to grow so too does the casino industry, which needs good regulatory frameworks, stable socioeconomic environment, and a talented workforce. These preconditions, however, are under threat in the UK due to the Brexit negotiations, which from the onset look to derail one of the fastest growing industries in the world. Though it’s hard to predict the future of Brexit and the British Gambling industry, it looks like the iGaming industry will have its fair share of challenges owing to Brexit.

The UK and other European countries’ online gaming regulatory frameworks are decentralised which means the UK sets its own regulations. While this denotes that there aren’t major changes to be expected, Brexit will no doubt affect this industry in the UK. The major problem with regards to regulations and license, is the possible breakup from the European Economic Area which will force gambling companies from the UK to assert their rights as businesses when they seek to expand into other European countries. Once the UK leaves the EEA, they will have to start drafting taxation and workers rights that will suit the destination countries they will be aiming to expand in. With this comes the possibility of stringent conditions put in place by individual countries to limit foreign companies and encourage local businesses.

Furthermore, good regulatory framework breeds legitimacy, which is one of the important values any business venture should have. Once the gaming industry starts to experience a shaking legitimacy, it will have problems accessing the lines of investments and debt from both private equity firms and banks.

The Brexit vote as has already been seen in the aftermath to leave UK at the end the negotiations in a precarious state. Further to this, every sector of the economy and the general atmosphere is full of uncertainty. Many businesses, including the casino industry, will have to operate for the next two years on a reactionary basis as there are likely to be many twists owing to how the negotiations are to pan out. This uncertainty will no doubt affect businesses due to an inhibited economic growth and limited potential investors.

One of the most important areas that Brexit will definitely affect the UK casino industry relates to the labour force. A survey conducted by a human resources company revealed that the UK casino industry is heavily reliant on foreign labour. Many companies are operated by foreigners and stringent movement policies will likely lead to a shortage of workers. There is also a possibility of brain drain among the UK nationals leaving for other European countries in search of improved working conditions and job security. The gaming companies themselves are likely to leave the UK if salaries and wages can be sourced where a large pool of workers poses as much more cost effective, thereby minimising working expenses.

Brexit will also affect the UK dependent nation of Gibraltar which is home to a large number of gaming companies. Gibraltar has some of the most famous brands including Bet365, Betfair, and William Hill among others. These companies employ over 3000 workers who commute on a daily basis from Gibraltar to mainland Spain. It is highly likely that Gibraltar will follow the UK and leave Europe and if and once it does, it will put many households at risk to lose potential disposable income. The problem is compounded by the fact that the UK and Spain are at loggerheads over this nation, thus any deal for Gibraltar to co-operate with Spain after leaving the EU will be problematic to achieve.

The effects of Brexit may not have manifested as of now, but they will definitely shake up the UK casino industry in the near future. The only way now to mitigate the effects solely lie with the negotiators and many in the industry hope for a soft Brexit from the UK ‘s point of view.