When the UK voted to leave the EU in 2016, various concerns came up about how the situation would affect different businesses. Online gaming and betting is one of the biggest and fastest-growing sectors in the UK. The region provides a huge percentage of the sports betting revenue since various operators are based in the region.
So, it makes sense that industry players would be worried about what Brexit would mean for punters and bookmakers. The transition period for the UK to leave the bloc ended on 31 December 2020. Therefore, it might still be too early to tell what the effects of the move would be. Nonetheless, it’s essential to consider some of the speculations to see what’s real and what’s not. Understanding the role that Brexit plays in the sports betting sector is critical for businesses and consumers alike.
The State of Gambling Regulation
One factor that Brexit would have had a great impact on, if it wasn’t set up the way it is, is regulation. Gambling is not regulated centrally. It means that EU nations are not governed under the same laws. Different countries implement individual rules for the betting sector. The UK Gambling Commission licenses betting operators in the region.
Some of the most notable names in sports betting hold a UK licence. You can check a list of the top betting sites on TTP to verify that. The UKGC is among the most reputable gambling regulatory bodies in the world and has no ties to the EU. Hence, operators registered in the UK would not have any trouble even with the pull out of the bloc.
What may be an issue, though, is how businesses in the UK and its territories work with their partners in the EU. Currently, no new British laws have been introduced that could affect these relationships. Europe also has a standoffish approach to gambling rules, usually leaving member states to their own devices. Partnerships between operators may not be adversely affected. However, if the UK proves that it can survive outside the EU, other countries might want to follow suit. With various regions governing themselves, European operators could find it hard to collaborate. As for punters, only local betting websites might be available for use.
Data Flow Consequences
The European Gaming and Betting Association (EGBA) expressed concerns that the agreement between the UK and the EU fails to address various matters, particularly data flow consequences. Information is integral in the online gambling sector, which is why regulatory agencies have provisions to safeguard it. The EU requires companies collecting, storing and processing data in the region to comply with the General Data Protection Regulation (GDPR). So, UK – based operators with customers in the EU still have to observe the necessary laws, which EGBA admits will be challenging.
Smaller enterprises may especially have a harder time meeting EU data standards compared to more established operators. Maarten Haijer, EGBA’s secretary-general, when speaking on the issue, said that the most critical challenge with Brexit was the complications of cross-border data flows given the copious amounts of information used in the industry. He explained that, without a long-term agreement facilitating the smooth flow of data, gambling operators based in the EU and the UK would have to decide the most suitable base for data storage to minimise disruption.
What Happens to Gibraltar?
Another issue that warrants discussion is the state of the gambling sector in Gibraltar. The British Territory is one of the most popular jurisdictions for gaming and betting operations. A fair percentage of companies in the sector are based in Gibraltar with regulation by the Gibraltar Gambling Commissioner. The British Territory is a desirable headquarter for many enterprises because of its favourable tax system.
With Gibraltar voting to remain as part of the UK, movements between the region might get complicated. Many employees who work in the local gambling industry commute from Spain. If the Spanish government restricted movements to the Rock, then that could mean companies lose their employees. A talent drain in Gibraltar could affect the quality of products and services severely as operators and software manufacturers struggle to replenish the workforce. All this is speculation, though, because nothing has happened yet.
One reason the effects of Brexit have not manifested themselves is that everyone has been dealing with a larger issue – the coronavirus. The global pandemic, which brought many industries to a grinding halt, had governments focusing on other problems. Although online gaming saw a dramatic surge in revenue, sports betting took a hit. With countries on lockdowns and social gatherings cancelled, many sports events took a break.
Some tournaments were cancelled, and others postponed. Thus, not much attention was paid to what Brexit meant for gambling laws and businesses. However, as Europe gets a handle on the COVID-19 pandemic, circumstances might change. One factor to watch out for is the exodus of betting operators from the UK. Companies that feel like they won’t benefit from the Single Market might choose to relocate to more favourable regions.
The sports betting industry is a big earner for the UK economy. So, it makes sense that stakeholders would be concerned about how the sector will fair once the UK leaves the EU. Presently, the industry has not started experiencing any significant effects due to Brexit. However, it’s still early to tell how the situation will play out. Thus, it might be necessary to keep reviewing the topic over time to see if anything changes. As it stands, betting companies in the UK continue to operate as they did before Brexit.