What about the Gambling Industry in Post-Brexit UK?
December 19th, 2019 2.00pm
The recently had elections in the UK saw Boris Johnson record an overwhelming win. But what does that mean in practice for the country’s gambling industry?
Johnson was one of the key figures who backed the increase of the fixed odds betting terminal (FOBTs) maximum stake to £2 and was also instrumental in the efforts to raise the point of consumption tax to its current size of 21%.
We’ve learned by now that Johnson will do anything to find the necessary funds, and the UK gambling industry could likely be used as a tool for the government’s spending plans in the future.
Whatever Happens, Little Can Surprise Us
And although the existing gaming taxes are high, the UK still doesn’t have direct taxes for consumers, meaning all wins are tax-free. Many are wondering whether this could change in the future, and though there is no indication that a move such as this would happen, it wouldn’t come as a big surprise.
After a convincing Tory victory, the country’s business community can finally turn its focus away from Brexit and concentrate on something more important like – doing business.
Once the UK leaves the European Union in January, we can look forward to a trade deal between the two sides, a deal that is likely to be signed by the end of 2020.
The negotiations will not be easy, but they’ll have to reach an agreement, especially as by the end of the next year the EU will be in a much weaker position, especially if a new banking crisis hits the continent.
Lifting a Burden from the Industry
A burden has been lifted from the country’s gambling industry, but that doesn’t mean stock of gaming giants such as William Hill, GVC and 888 will immediately skyrocket. But some issues still remain, some even imposed by Johnson and his government. No one will abolish taxes and regulations, with new ones ready to be introduced to bring more money to the government coffers.
Markets weren’t surprised by the outcome of the elections, as most of the polls have succeeded in predicting the final result. Now the country can focus on other things other than Brexit, which is news that will delight investors.
It should be pointed out that the gambling industry in the UK has already managed to consolidate, as much as it could in these circumstances. GVC now owns Ladbrokes, bwin and Coral, while Flutter now controls Paddy Power Betfair and The Stars Group. The only ones to have stayed independent are William Hill, Rank and 888, and their stocks are the ones to keep an eye for in the coming period. Of course, any potential crisis will have an impact on them as well.
The date we’re all eagerly waiting for is January 31, 2019 – or whenever Parliament approves Johnson’s deal the United Kingdom officially leaves the European Union. What will happen afterwards is a mystery for experts, as its banking system is unstable enough even without the Brexit. This situation will have an important impact on the eventual trade deal between the UK and the EU, which in turn will reflect on all industries, including the gambling one. For the time being, we can only guess what’s to come next.
In the meantime, a recently conducted poll revealed that the majority of adults in the UK wanted to see a ban on credit cards for online gambling. The results of the poll were posted by the United Kingdom Gambling Commission. Some parties even openly supported such a notion, promising to move forward with it if they win the elections.
The gambling industry could be used as a tool for the government’s spending plans in the future.