Will the UK be Left Behind by Liquidity Sharing Pacts?

In this post, we’ll assess this in closer detail, and ask whether the UK’s gambling market faces an uphill battle to maintain growth in the wake of Brexit?

How will European Liquidity Agreements work, and should the UK Care?

In general terms, Brexit negotiations have turned a little sour recently, with chief negotiator Michel Barnier striking the most recent blow by confirming that London would not be afforded a bespoke trade deal under any circumstances.

This increases the chances that no deal will be agreed by the UK and the EU, leaving Britain economically, socially and politically adrift from its European neighbours.

With this in mind, the decision of the EU’s four regulated gambling markets to enter into an online poker liquidity sharing agreement could not have come at a worse time for the UK. This progressive pact, which was officially unveiled during the summer, saw operators France, Spain, Portugal and Italy join forces and openly share technology, data and access to their vast consumer bases.

This will enable these countries to expand more prolifically into international markets, with operators being empowered to increase their revenues and improve the proposition that they offer to a growing group of players. For fast-growing markets such as Spain, which already generates most of its’ annual, €900 million turnover from international markets, this provides an exciting model that allows for scalable and impressive growth.

In contrast, the UK market suddenly appears insular and isolated, with the spectre of Brexit making it almost impossible for the nation to join their European counterparts in such an agreement. The UKGC also has very little leverage to negotiate with nations such as Spain, which already benefit from sophisticated regulatory measures and access to an international audience.

The Bottom Line – Why the U.S. May Offer Salvation to the UK

This has only served to exacerbate existing concerns within the UKGC, with Brexit and the prospect of rising consumption tax potentially encouraging some of the UK’s market leading operators to relocate abroad.

Fortunately, salvation may exist in the unlikely form of the U.S. market. After all, this is ground that the UKGC has traversed before, when negotiations to join forces with New Jersey failed after a series of discussions back in 2015. Now that this state has finally entered into a liquidity sharing agreement with Nevada and Delaware in the U.S., however, a viable model now exists for the UK to resume negotiations and dramatically increase its global market share.

The UKGC could also lend its considerable regulatory weight to the U.S. market, which would enable it to add tangible value to any agreement that it enters into.
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