With the impacts of Thursday 23rd June's momentous referendum decision for Brexit still seeping in, I must unfortunately forecast that the future is undoubtedly bleak for the British casino industry. I know this will not sit well with a traditionally libertarian industry, who many I am certain will have voted to ‘regain control’, but for our industry this is an absolute nightmare.
I should point out in a caveat to my comments that I, like anyone else, is completely unsure of what will happen and that, in essence, is 99% of my point. The future is shrouded in mystery and the one thing financial markets don’t like is uncertainty. The only thing certain is that this will mean economic downturn, if not recession, which means less money in the pockets of those we depend on for customers. You may be sat there thinking, ‘doesn’t matter, we’re high end’, well guess what it, it will. When the UK becomes a worse place to do business then your high end guys will go elsewhere, as you know they aren’t coming to London just to play at your tables. Plus when a government becomes desperate for money, you think casinos are going to be ignored? Pencil in a tax rise in the short term.
So for the next two years, we will have to negotiate an exit from the EU (unless things change remarkably) and a way we can still trade with it. As of the time of writing, Boris Johnson seems to be suggesting that a Norway model is possible, but as that involves all of the costs of EU membership (full movement of people and obeying EU rules) without any ability to influence EU regulation and that may not float with the 17 million who voted out. If you consider game theory, it is not in the EU’s interest to be nice to us in any way when it comes to negotiations as to do so would set a precedent and soon every EU country would be voting for Brexit to try and get better terms. We need to steel ourselves to the fact that after two years of uncertainty we could quite feasibly be let adrift in the world with no EU arrangement and trade deals done under WTO rules and massive trade tariffs. With little to offer the world apart from pop music and comedy, especially when all our heavy manufacturing and financial industry moves away to be part of the EU, the forecasts of a 6% drop in GDP (3-4% if we do have an EU deal) mean there will be much belt tightening to come. Of course I’m being pessimistic but I can’t see how it helps the EU to be nice to us now.
Will there still be a casino industry? Yes, of course, we’re one of the few industries which has little EU involvement outside of employment and health & safety. Will it grow? No – economic recession plus increased taxation plus no regulatory liberalisation, as no one in government will have any time for anything else but Brexit, means the best we can hope for is it to stay at current levels but I would expect a downturn.
I know I should mention the obvious that getting staff from Europe will be more problematic and thus give all of us a headache, but I don’t think this will be the case. The irony of this whole omnishambles is that no-one is thinking that immigration will be stopped by one iota. You will still be able to get Eastern Europe’s finest to supervise, croupier, serve and clean. So in essence it looks grim, not build a bunker in the back garden grim but definitely locate the plans for said bunker and keep them in a safe place grim. You have been warned.
article uploaded 8th July 2016