As politicians scramble for deals regarding the looming Brexit date next year, many businesses both in the UK and beyond are left wondering what will happen to their bottom lines following Britain’s departure from the European Union.
Brexit is expected to have a wide impact on many country’s economies. One of those expected to be worst affected is Ireland. In fact, it has been stated in a leaked government research paper that Ireland could be worse hit that even the UK.
Since it’s a major industry in both Ireland and the UK, the gambling sector will surely be eyeing the Brussels negotiations with interest. So, does the gambling industry have much to worry about from either a hard or a soft Brexit? Let’s consider the possible outcomes.
How Will Brexit Impact Ireland Generally?
The overall impact on the Irish economy of Brexit is expected to be between two and seven percent on GDP. These figures are courtesy of a research paper prepared for the Irish government. The precise figure will depend on whether a so-called soft or hard Brexit deal is reached.
A soft Brexit deal would see the UK adopt a relationship with the EU like that of Norway. Meanwhile, a more hostile exit would involve the UK reverting to a pre-EU style relationship. This would mean resuming World Trade Organisation (WTO) rules. Naturally, the harder the deal, the worse the impact is expected to be.
Worryingly, for those involved in the Irish online casino industry, the sectors expected to be worst hit are food, medicine, chemicals, retail, air travel, and web businesses. However, gambling is something of a unique web business and the impact of Brexit is much less clear with regards to it. In fact, some believe that the UK’s departure from the EU will have a negligible or even positive impact on the sector.
Ireland’s Relationship with Online Gambling
Like the UK, Ireland has been quick to embrace online gambling. Along with an appreciation for the innovative potential of technology companies, the nation’s favourable taxation policies encouraged US firms to explore using Ireland as a base for operations. The likes of Full Tilt poker had famously decadent Dublin offices and others continue to call the country home.
Ireland also has some of the most well-defined regulations governing gambling companies on the planet. This is another quality shared with their British neighbours. The 2015 Betting (Amendment) Act fully regulates the industry in a way not seen in many other markets across Europe and beyond.
Today, Ireland hosts several betting and gambling websites. Many are featured on the pages of NoDepositFriend. Its easy to see that there is no shortage of options, but new laws may limit availability and competition which will negatively affect players.
Gambling Industry is Different
One of the main reasons why many believe the gambling industry will be less affected by Brexit than others is down to existing UK legislation. Essentially, the British Isles’ gambling sector already “left” Europe. Since foreign companies need to be fully licensed by the UK Gambling Commission to offer their services in the nation, as well as paying point of consumption tax to the UK government, the trade barriers are already in place between the continent and its island neighbour. Since gambling is such a lucrative market in the UK, it’s unlikely that those companies based outside of Europe will quit on it entirely if all they need to do is reapply for a license.
Additionally, Ireland is still a country that loves to gamble. Any Brexit deal, hard or soft, will not change this. It can somewhat rely on its domestic market for revenue and this will surely limit the impact of next year’s departure of the UK from the EU.
Gambling Could Still Suffer
One thing that seems unanimously agreed upon at this point is that both the economies of the UK and Ireland will suffer as a result of Brexit. Whilst gambling companies might be less impacted due to existing restrictions regulating their access to the lucrative UK market, a weaker economic climate generally might encourage more frugality from the populations of both Britain and Ireland. With less disposable income, will the online gambling market still be worth pursuing?
Fortunately, Irish gambling companies have a great opportunity presenting itself in the United States. Since the recent repealing of federal gambling legislation, states are now able to decide for themselves whether to offer sports betting services. Already, companies are exploring the emerging US market which is expected to be worth billions. Existing firms who act quick enough will be able to more than offset any squeeze felt in the wake of Brexit by tapping a whole new set of customers stateside.