It has been over a month since 52% of the UK stunned the rest of the world by voting to leave the European economic community they’ve been part of for more than 40 years, becoming the first country to do so since the EU’s evolutionary formation during the second half of the last century.
What does Brexit mean for the casino industry? It’s hard to say, but there have been plenty of clues over the past four or five weeks, enough to start speculating at least.
The true nightmare of Brexit is that nobody really has any idea of what’s going on and won’t for at least another few months, with a final decision on triggering Article 50 and beginning the process of leaving needing to be ratified by a House of Commons vote.
MPs are on holiday until September, come back for a few days and then head to whichever beachside hotel their parties decided to deign with a national conference.
Of course, it’s at least possible Article 50 may never be triggered.
Prime Minister Theresa May could shock us all with a snap autumn election on the terms of Brexit, catching the failing Labour party with their pants down and possibly on the way out, or Remainers in the country might somehow scramble together a winning coalition to block the shock departure.
Add in that it could take up to a decade for Britain to fully extricate itself from all EU laws and regulations, allied with whatever political disaster awaits the world next (see America, right now), this is what uncertainty looks like.
The impossibility of predicting what’s going to happen in the UK over the next five weeks, months or years has already seen at least one big UK gaming player, former Aston Villa football club sponsor Genting Malaysia, take a confidence hit from investors following the referendum vote.
Genting, who are particularly exposed to the whim of UK voters with over 40 casinos in the country, saw their share price drop around 3.6% in the three weeks following Brexit, according to Bloomberg.com, leading Japanese investment bank Nomura Holdings to make the below statement in a report:
“We see a dual negative impact from the results of the Brexit vote. A weaker economic climate will likely result in slower business volumes, and will be further hurt by a weaker Pound to (Malaysian currency) Ringgit translation.”
Though there has been little economic data through regarding the impact of Brexit so far, the sharp fall in the Pound, from $1.7 at the end of 2014 to around $1.3 today, alongside at least as much uncertainty in the markets as the ‘great recession’ seven years ago, means it’s not looking good.
New Chancellor of the Exchequer Philip Hammond has spoken of ‘resetting’ the economy, which likely means lower tax rates and less spending now the Conservatives feel they have all the levers of government back in their hands, but whether the UK can outrun events by going full Friedrich Hayek is debatable.
Leaving the European Single Market, which plenty of powerful people on the Brexit side of this argument feel is worth the risk, could conceivably cause a flight of capital from London, the current financial capital of the world, if corporations really do feel the balance has tipped to Paris, Frankfurt, or even Hong Kong.
London is too important a city with too many advantages, including language, diversity and timezone in relation to other financial hubs, to be hollowed out completely, but making life difficult for investors, even if only for a year or so, could see a lot of balls being taken home.
Suffice to say, less money in the country means fewer pounds in the pocket of the punter, spins on the roulette wheel, chips on the blackjack felt, rolls of the craps dice and all-in wagers on the Texas Hold ‘Em river.
It might not be all bad news for the industry though…
With the UK Government still not letting on what Brexit means when Brexit means Brexit, we can only speculate from the words of prominent Leavers during the campaign.
Priti Patel MP, then Employment Minister and now Secretary of State for International Development, caught plenty of attention when claiming leaving the EU would enable Britain to cut reams of ‘red tape’, basically code for deregulation across industry, including workers’ rights.
Incidentally, the European Court of Justice, from whose jurisdiction the UK will almost certainly escape, ruled against Germany’s overly-restrictive gaming laws earlier this year, paving the way for increased online gambling, including poker.
With vicar’s daughter May in situ and seemingly secure as Prime Minister, she could use the opportunity to tighten up the house rules, considering the former Home Secretary leads the party of social conservatism, but the mood music is all coming from the opposite direction.
Whether or not further freeing up of casino licensing is desirable is irrelevant, but a shift towards lower-tax, lower-regulation economics would surely herald such actions.