On 31 January 2020, the United Kingdom finally left the European Union. What will follow now is a 12 month transition period where everything will pretty much carry on as normal. During the next year however the European Parliament and the UK government will work to figure out exactly how things will function going forward.
Big names staying put
Despite some predicting a doomsday scenario for the Uk gambling industry, it seems like this may not be the case. Online gambling and casino operator LeoVegas just announced that it will restructure its UK operations and shelve plans to open a larger Malta-based office.
Last week, the gaming giant announced a series of strategic measures that would lower costs. These include pulling the Royal Panda brand from the UK and migrating Rocket X to its main multi-brand platform Rhino. These brands which include 21.co.uk, BetUK, Slot Boss, and UK Casino were sold to the company back in 2018.
LeoVegas said that running these brands across three platforms was unnecessarily complex. They also let go some 100 staff members, therefore a move to Malta was no longer needed. This, the company says will save them around EUR 1.7 million a year. This could also be seen as a sign of confidence for online gambling in the UK, even a post-Brexit environment. For such a major player to decide not to venture to Europe’s leading iGaming jurisdiction, means that they don’t expect to lose much in the way of profits by staying put.
European Commission review
Another announcement made on Brexit day was from the European Gaming and Betting Association who urged the European Commission to conduct a review of its approach to online gambling. This, they said, would hopefully drive better consistency in digital rules. The EGBA said that by strengthening the operation of the digital single market, EU online gambling standardisation will improve.
One area of uncertainty lies within Gibraltar. Home to over two dozen online gaming companies, it has been a jurisdiction of choice due to low taxes and access to the EU single market. These online gambling companies account for some 25% of Gibraltar’s economy and it is not yet known what will happen to them.
Residents of Gibraltar voted overwhelmingly to stay in the EU and Spain has expressed interest in taking control of the territory, a move that is not popular with locals. The next 12 months will be key in ascertaining just how Gibraltar will continue to function as an iGaming jurisdiction without its EU benefits.
In terms of legal matters, the UK is one of the most heavily regulated gambling markets and many of the laws and processes that are already in place will continue to apply. For now, at least, not a lot will change from a regulatory point of view, particularly if UK online gambling operators also hold relevant licenses in EU countries. Also, EU companies with UK licenses will still be able to operate without any issue.
The biggest challenge is expected to be when companies need to set up offices in an EU jurisdiction or the UK in order to carry on offering their services. They may well find themselves subjected to increased tariffs as well as having more difficulty accessing foreign workers.
Impact on operators
The biggest impact on iGaming operators will be those that are also licensed by the Malta Gaming Authority. Under Regulation 10, a license holder must be established within the EEA. As the UK is likely to be removed from the EEA, this means that all UK-based operators will need to find a way to also establish themselves in the EU. This can be done via transferring their license, or by re-domiciliation.
Those offering services to or from Malta will also have to consider regulation 22 which says that those not licensed in Malta have to apply for what is known as a recognition notice.
If you are unsure how Brexitt could impact your online gambling operations, or you are looking to set up in either the EU or the UK, we can advise you. Fast Offshore has more than two decades of experience in iGaming and we have helped countless clients set up in juridictions from Curacao to Malta, and of course the UK and Gibraltar. Whether you want advice on licensing, help with applications, or fiscal and corporate services assistance, contact us today for dedicated expertise from our team of experts.