The world’s biggest bookmakers may have made a buck or 2 on last week’s upset Brexit outcome but it stands to cost them dearly in the future. Particularly those based and licensed in Gibraltar.
The likes of William Hill, bet365, BetVictor, 888 and Ladbrokes are now facing the prospect of holding an online gambling license that gives them no legal access to the EU single market after the UK negotiates its Article 50 withdrawal from the EU. In turn Gibraltar, whose economy benefits handsomely from the presence of these large operators, faces the prospect of having these operators jump ship to other licensing jurisdictions…Malta being the obvious choice.
Gibraltar’s unhappy EU exit
Remain voters in the England who feel hardly-done-by should spare a thought for their brethren in Gibraltar, where only 4.1% of voters wanted out. Gibraltar are understandably miffed at being dragged kicking and screaming out of the EU and are scrambling to do something about it.
The territory’s chief minister Fabian Picardo told the BBC yesterday that he and Nicola Sturgeon, First Minister of Scotland (the other reluctant exit casualty) were exploring options to remain in the EU irrespective of the exit of most of the UK. He told the BBC,
“I can imagine a situation where some parts of what is today the member state United Kingdom are stripped out and others remain. That means that we don’t have to apply again for access, we simply remain with the access we have today, and those parts that leave are then given a different sort of access, which is negotiated but not necessarily under Article 50…”
There is precedent for such a decoupling. Greenland decided it wanted out of the EU in 1985 despite remaining part of the Danish Realm (Denmark remains to this day in the EU).
“The position of the people of Gibraltar is that we’ve expressed, perhaps even more clearly than the Scots, what our view is going forward, what should happen – that we should continue to have access to the single market to the European Union. My obligation is to protect and promote the interests of Gibraltar and to find such partners who may be willing to do the same thing within the United Kingdom.”
It’s a fair point from Picardo. But then life isn’t always fair. Just ask the Isle of Man.
Isle of Man issues
This Crown dependency is another well known online gambling licensing jurisdiction, counting Paddy Power among locally based operators. It’s a small place with big e-commerce ambitions that will rely significantly on access to the single market to fulfill these ambitions.
IoM residents didn’t even get a vote in the referendum. This is because they’ve never been a part of the EU. But they still get access to the EU single market by virtue of Protocol 3 of the UK/EU Act of Accession. Protocol 3 no longer applies once the UK is out, leaving IoM up the creek without a paddle.
Of course the terms of UK’s negotiated exit will be key. But right now this is just more uncertainly for the likes of Gibraltar and IoM who would probably not get many seats at the negotiation table. You can understand them both wanting to find a solution independent of getting caught in the washing-machine separation that Jean Claude Juncker has promised to be, “not an amicable divorce”.