Poll results: Brexit will harm the egaming industry
Slight majority of EGR readers harbour concerns over reduced access to unregulated markets and the future of Gibraltar
The UK’s decision to leave the European Union is likely to harm the country’s egaming industry, according to respondents to this week’s EGR poll.
More than 53% of respondents agreed that Brexit would damage the industry, with concerns centring around restrictions on the freedom of movement of egaming talent throughout the EU and the future of businesses headquartered in Gibraltar.
Indeed, Spain announced this morning it will seek co-sovereignty on Gibraltar following the Leave vote, which was trading as high as 8/1 yesterday, with a view to ultimately taking control of the peninsula.
Gambling companies are unlikely to see any immediate impact given exit negotiations could take up to three years, but over the longer term firms could be forced to seek a new home for some of their licensing and operation centres.
There are also now concerns about whether UK firms will be allowed to continue operating in unregulated European markets based on the EU principle of cross-border freedom of goods and services.
Listed gambling companies have already seen their value take a significant hit, with Hills shares down 7% on Friday, Ladbrokes down 5% and Paddy Power Betfair down 2%.
However, all three companies have rebounded since the markets opened, suggesting a broader market confidence in gaming companies.
And that confidence is shared by 47% of respondents to this week’s poll, who believe the industry will weather the Brexit storm.
Optimists point out that the EU does not regulate the online gaming sector and operators are already licensed in multiple jurisdictions, with the rest of Europe expected to reregulate in the next couple of years.
In addition, the UK is also one of the world’s biggest regulated online gambling jurisdictions and the market represents an ideal safety net for domestic firms.