A London-based financial advisory corporate, Davy, has issued a note after the Brexit vote claiming that the upcoming months of legal and fiscal uncertainty would negatively affect the UK gambling industry. According to the opinion featured in the note, the majority of the large retail and online gaming operators would witness a decline in performance.
Davy offers possible decline of three leading gaming groups operating on the Kingdom’s territory in order to better illustrate the impact Brexit will likely have. Therefore, the possible EBITDA fall of Paddy Power Betfair is set at 4.4% to £466 million. The same segment at Ladbrokes would likely drop for 17% i.e. for £18.7 million to £92 million. Finally, Davy mentions William Hill and predicts an EBITDA decline of 12% to £271 million. In the advisory’s opinion, the companies would have to impose cuts and similar operational adjustments at the time when another recession looks like a real possibility.
There’s also fear of possible changes in terms of licensing and regulation. The Gibraltar Betting and Gaming Association (GBGA), a trade association for Gibraltar-based remote gaming operators, has already started informing companies that until Brexit is initiated by the Brit government no changes would affect them.
Albert Isola, Gibraltar’s minister for gaming, reassured local businesses that the government was committed to them. He pointed out that “there will be little or no change” for individuals that live and work as well as travel to Gibraltar. He concluded that all indications were showing that the business would continue to function as usual.
In a response to the minister’s statement, the GBGA promised to work with the government in order to help operators during this time of uncertainty.
The UK’s EU referendum let everyone of voting age to express their opinion whether the Kingdom should leave or remain in the European Union. The vote was held on 23rd of June and the majority of the voters (52%) circled the “Leave” option.