The online gambling industry is worth a staggering £2.7bn per year, and rising, to the British economy. Complex laws and regulations ensure that UK based gamers can game safely. Tax regulations mean that Britain is paid what it is owed by online gaming companies. UK Jurisdictions play host to numerous gaming companies. All of these variables could change after Brexit, whether we leave with a deal, or without. So, what should we expect?
UK Regulations and Licensing
In what could be good news for a post Brexit UK, our country has regulated its gambling services independently of the EU for some time already. The UK Gambling Commission (UKGC) requires that online gambling operators have a license in order to operate inside the UK. This has been the case since 2014 when a landmark case saw Gibraltar termed, for licensing purposes, as part of the UK.
Not only does the UKGC require UK-based gaming companies to acquire the license though, they also require gaming companies from outside the UK to comply. This should mean that our interactions with online gaming companies both inside and outside the UK will remain unchanged. However, this depends entirely on whether legal frameworks are changed following Brexit, which is a point that must be considered.
UK Territory Jurisdictions
Where this becomes more confusing is that a number of UK territories have their own separate jurisdictions. This includes Gibraltar with The Gibraltar Regulatory Authority, Alderney with Alderney Gambling Control Commission, The Isle of Man with Gambling Supervision Commission, Guernsey with Guernsey Gambling Control Commission, and finally Jersey with The Jersey Gambling Commission.
All of these jurisdictions have their own laws which will likely need to be renegotiated after Brexit, meaning that overseas gambling companies, including within these jurisdictions, might consider moving their business elsewhere. Losing trade from Gibraltar and the Isle of Man could be catastrophic for the UK, as these islands bring in an enormous percentage of gambling tax revenue. Gibraltar alone is home to 30 separate gambling companies, including table games operators, bingo providers, betting companies and more.
The good news is that moving companies involves time and money. Many companies could be reluctant to move simply because even if taxes increase, the effect could be considerably less than moving their whole operation would be. If the UK continues to operate sensibly, then it's plausible that most, if not all, of these gaming companies will stay where they are currently.
The UK's Gambling Taxes
As mentioned before, Gibraltar is home to a staggering 30 separate gambling companies, including table games operators like Vegasslots, bingo providers, betting companies and more. Vegasslots offers a wide range of different table games, free slots as well as live dealer casinos where customers can play directly against a human groupier. All of the different providers listed on Vegasslots are UKGC licensed and were carefully reviewed to only offer the safest and best options.
Companies based in Gibraltar were told that their taxes on revenue would be increasing from 1% to 15% for any revenue gained from UK based customers. This would have come as a huge blow to Gibraltar based companies, but their businesses remained available to UK customers.
Following this in 2018, businesses were told that Remote Gaming Duty (RGD) taxes would be rising again the following year to 21%. Whilst this was not out of greed, but as a response to the cap from £100 down to £2 on single spin gaming, it would still prove difficult for gaming companies to stomach.
RGD effects all companies, no matter their location in the world, that provide services to UK customers. On one side of the coin the UK has already made staggering tax hikes for companies across the world and not lost out on trade. On the other side, if it makes any more rash changes, it could be the straw that breaks the camel's back. Therefore, we can assume it is likely that any tax hikes will be saved until the distant future, to allow online gaming to continue perfectly uninterrupted.
Recouping Tax Losses
With comparatively high taxes being due on UK based gambling revenue, gaming companies are looking to cut their losses in any way possible. Players in the UK have not had to pay any tax on their winnings since 2001 and it is very unlikely that this will change post Brexit, spelling good news for the consumer.
However, this still leaves the provider with the question of how to negate some of that extra tax money. One way that casinos could recoup losses if the UK does decide to further increase taxation would be to increase the house-edge. For players this would be an annoyance, but if the choice is to deal with a higher house-edge, or forego online gaming altogether, then it shouldn't cause a large drop-off in gamers.
It seems as though the catastrophe that was originally predicted for the UK's online gaming market could have been a huge over reaction. Brexit is unlikely to have a huge impact on this healthy sector, providing that no rash new laws, taxes or rules are brought about in the immediate wake of the UK leaving the EU.