Brexit – Britain’s vote to exit from the European Union – is big news for UK operating gambling companies.
This, of course, includes Daily Fantasy Sports.
The UK Gambling Commission licenses and regulates members of this growing new industry.
The future of DFS providers in a post-European Britain is a complex and unclear one. However, we’re here to explore how this massive political change may affect the games you know and love.
What Does Brexit Have To Do With Gambling?
Possibly a lot, depending on how Brexit works out now that the vote is in. We can only make an educated guess on how it will affect daily fantasy sports.
Daily fantasy sports sites operate from various key locations – locations which Brexit may impact. Here we will delve into a few of the most prominent ones, in order to evaluate how Brexit may impact the sites operating from these areas…
The main English-based DFS operator is DraftKings. This site is one of the biggest players of all in daily fantasy sports. They had a UK launch in January 2016, after building up a huge following in the U.S.
With a registered office in London, the UK DraftKings site is licensed by the UK Gambling Commission and pays UK taxes.
As you will see below, this setup isn’t a common occurrence. In the event of Britain’s exit, these occurrences may become even rarer. This is because, in the words of the European Gambling Commission:
“Operators licensed in one or more EU countries can offer gambling services in other countries without the authorisation normally required in those other countries.”
Would DraftKings want to sacrifice possible European audiences for the sake of physically remaining in the UK? They have, after all, confirmed an interest in expanding to more European audiences.
To compare: Online Poker Report have speculated that perhaps Bet365 will reconsider its location in the event of a Brexit. They were one of the few gambling companies to stay after the 2005 Gambling Act came into force, but a Brexit may push them over the edge. If they stop being located within the EU or EEA, they similarly may miss out on European customers.
Scottish DFS companies and players alike may see big changes in the future, now Brexit appears to be in our future.
Scotland’s decisions following the Brexit vote may well affect the Daily Fantasy Sports landscape in the UK.
How and where Scottish DFS fans will be able to carry on playing in this situation is unclear. Scotland would either join the EU (not an easy thing in itself) and submit to EU regulations, or create its own gambling laws.
As for operators – PlayON and Premier Punt both have their bases in Edinburgh. As with DraftKings, whether these companies would want to stick with the UK after Brexit is a valid question. And if Scotland does go for independence, they may break away from the UK anyway.
As a popular licensing jurisdiction, Malta is as a hub of iGaming development and regulation in the EU. As a member of the British Commonwealth, it is on the UK Gambling Commission’s ‘white list’. This list includes operators who can freely advertise in the UK.
Pair that up with nice tax rate and low licensing fees, and you can see why Malta is very popular with the gambling industry.
This country plays host to Fanaments, FanTeam and Fantasybet, who have licenses under the Malta Gaming Authority (MGA).
Before Brexit became a reality, MGA Executive Chairperson Joseph Cuschieri commented:
“The biggest concern is the uncertainty that will follow, as it is not yet clear or indeed known what will be the UK’s relationship with the EU.
“The MGA regulates a number of companies which also hold a UK Gambling Commission licence and should the freedoms of movement be severely affected, then I would expect that these operators would have to restructure in a way that best suits their business model and commercial interests.”
The risks to daily fantasy sports and related companies in Malta don’t appear to be as clear-cut as with fellow licensing jurisdiction Gibraltar.
This is because Gibraltar is a British Overseas Territory. Brexit will have much more direct impact over its EU membership and legal structure. However, Brexit is a concern for Maltese gambling companies too, given the uncertainties and changes it may cause.
Isle of Man
Daily fantasy football site Mondogoal resides on this small island off the UK coast.
The Isle of Man, another licensing jurisdiction, is attractive to gambling firms thanks to its British Crown Dependency status.
The island benefits from its British association, while not having to follow UK tax and regulation laws. As a result, the island’s taxation and e-gaming duty rates are relatively low.
The island has its own Gambling Supervision Commission. This body was the first to regulate e-gaming and gambling websites, and provide protection to customers.
Britain’s move to exit the EU may have an impact on trade agreements set up between the Isle of Man and the EU. This is something they have voiced concerns about to the UK government.
Possible changes for EU trade is unlikely to be an attractive prospect for Mondogoal. They have a big European audience. However, such changes are not set in stone. British Crown Dependencies may well retain freedom of EU trading.
Remember: Don’t Panic!
Some post-Brexit predictions are full of doom and gloom. However, it will take a while for anything to fall into place.
The Brexit is unprecedented in EU history, so it’s difficult to say what will happen with confidence. But what is can say is this: as long as there’s a UK market, operators will continue to try their best to provide daily fantasy.