UK online industry’s multi-national aspect in Brexit threat

UK online industry’s multi-national aspect in Brexit threat

Thursday, September 15, 2016 Posted by Totally Gaming
Leading analyst says the effect of Brexit on recruitment will be profound

One of the most important aspects of the UK’s Brexit vote in the summer will be how it will impact operators’ recruitment policies, according to a leading analyst.

Opening up the Betting on Sports conference taking place in London this week, Paul Leyland, founding partner at gambling consultancy Regulus Partners, said that the free movement of people across the EU was a previously accepted given on the part of the online gambling industry.

“Gambling has thrived being a highly cosmopolitan, highly global sector that has taken the freedom of movement for granted,” he said. “That is over for the UK-facing and Gibraltar-based businesses.”

He continued: “Many UK-facing companies employ a lot of European nationals. All the way through the organisation. We have taken it for granted across the entire economic life of online gambling. We can say goodbye to all that. That will create some pretty significant headaches for recruitment.”

This was likely to have an effect not only on UK-based gambling operators, but would also impact those that are based in Gibraltar, where the impact of Brexit is likely to be perhaps even more severe than in the UK.

Leyland predicted Gibraltar would suffer from a drain of talent as companies either moved to in-country operations across Europe or considered basing themselves in the remaining European gambling hub, Malta.

He suggested it was “fanciful” for anyone to believe that Gibraltar would be granted any special dispensations from the EU in any forthcoming Brexit negotiations and that the benefits of the previous passporting that the UK also enjoys would almost certainly disappear.

“There is no way the British government will sacrifice on iota of its domestic agenda for gambling or an offshore tax haven,” Leyland added. “The likelihood of the EU doing a deal around Gibraltar very small. Britain would have to sacrifice something quite important to do that, and that isn’t likely. Gibraltar will be thrown under the bus pretty quickly.”

For UK operators, the picture was hardly less bleak. Leyland suggested the UK-facing operators, both online and land-based, could expect a tougher regulatory backdrop in the UK. He said a key risk was around further regulation of gambling advertising and issues around speed of play of games.

“We like to assume governments don’t do stupid things and that they like collecting tax,” he told the audience. “Unfortunately, history doesn’t bear this out. Gambling is an area where governments don’t like to spend too much, or too much thought. Online has largely got away with it so far, because FOBTs have been the light. Broadly speaking, governments only deal with gambling when they are responding to a crisis. And crisis management is very rarely calm, very rarely considered, and almost never proportionate.”

Totally Gaming says: Brexit is a barely understood phenomenon generally, but we can guess that the sector will surely be changed by it. However, the good news for the largely UK-facing online gambling operators is that as far as growth is concerned, the 20%-plus revenue gains being enjoyed at present will insulate the sector from the worst of any Brexit-related recession.

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