With a chaotic ‘no-deal’ Brexit looking increasingly likely, what can the UK, and gambling firms expect?

Despite reassurances from the Spanish government that nothing much will change regarding the Spain-Gibraltar relationship after Brexit, it seems British gambling firms are getting jittery as a “no deal” Brexit looks increasingly likely.

Over the last few weeks, both the Spanish government and Gibraltarian government have been at pains to reassure the gambling businesses based on the tiny 6.8 km² strip of British territory, but with Brexit looming, there are increasing indications of an exodus from the rock.

To appreciate exactly why a catastrophic no-deal Brexit is looking likely, and why gambling firms in Gibraltar are getting so nervous, despite Spanish reassurances, it is useful to understand the traumatic and divisive nature of Brexit in the UK.

What a ‘no-deal’ Brexit might look like

First of all though, lets just consider what a no-deal Brexit could look like, as many of those currently outside the UK are likely to be unaware of the full implications.

Here are just a few of them:

• Instant loss of freedom of movement and reinstatement of customs and immigration rules
  • Possible 20 – 40 mile queues of trucks outside the ports of Dover and Calais. Time sensitive freight ruined, dramatic increase in transport costs, shortages at supermarkets, breakdown of ‘just in time’ supply chains severely disrupting industry.
• Instant invalidation of air transport agreements
  • Possible cancellation of the majority of flights from the UK, including to all EU nations due to suddenly invalid aviation agreements, insurances, safety certification, professional certifications etc.
  • Massive queues and disruption at UK airports.
• Loss of financial passporting rights
  • This will cripple the ability of firms in London, the financial centre of the world, to offer services to EU businesses.
• End of automatic rights of EU citizens to live and work in UK and UK citizens to live and work in EU
  • Despite assurances and agreements to respect the rights of those already resident, these will only be valid if there is a deal. In a ‘no deal’ scenario people could suddenly find themselves illegal immigrants with no rights.
  • This will cause major headaches for recruitment, as companies will suddenly find themselves having to tackle immigration rules and incur considerable extra costs to bring even skilled workers into the UK, or to bring skilled UK workers into the EU.
• Reversion to World Trade Organisation rules and tariffs
  • In the absence of replacement trade deals with individual countries (most trade agreements the UK relies on were made through the EU), British international trade will be hammered by punitive tariffs on many products.

Undoubtedly many, especially those living outside the UK, will think this is all a bit alarmist. However, anyone who has been following the UK news for the past year and a half, will be aware that the situation is every bit as serious as it sounds.

Illustrating the gravity of the situation were recent widespread reports (the Independent, Express, Mirror, Irish Times, Sky News, MSN and more) that the UK government could be forced to charter or even requisition ships, using wartime powers last used in the 1982 Falklands War, to ensure that enough food and medicine can be brought into alternative ports, from outside the EU, to stave off chaos.

Even just considering this, its easy to see why firms like William Hill are apprehensive about being based on a tiny peninsula of British territory at the southern top of Spain, depending on staff who have to be able to cross back and forth between British and EU territory at least twice a day!

But, Brexit has the potential to cause a whole lot more than disruption and hassle at the Gibraltar-Spain border, and that has many businesses increasingly concerned.

Business leaders sound the alarm

Though business leaders were, until recently, trying to avoid being drawn into the political storm surrounding Brexit, no doubt in the hope of a good deal being reached, in the last few months they have been sounding the alarm.

In July, it was widely reported, including by the Times of London and Bloomberg, that Amazon.com Inc.’s U.K. head, Doug Gurr, said there could be “civil unrest” within two weeks if Britain leaves the European Union with no deal.

Whilst many scoffed at this claim, it is further supported by reports that the government is drawing up plans to use deploy troops to ensure vital supplies of medicine and other essentials get through the chaos, and to support the police in dealing with “civil disorder” at Dover.

Warnings have also been coming in thick and fast from major companies like Airbus, Jaguar Land Rover, Rolls Royce, BMW, Nissan, Toyota and others that their manufacturing operations may have to cease if their highly sophisticated and efficient supply chains breakdown.

Chaos in the UK?

It is widely believed among civil contingency planners that modern developed nations like the UK are only ever a few days from civil collapse and chaos, thanks to the modern system of ‘just in time’ supply chains – which can lead to empty supermarket shelves within hours if interrupted – and the fact that modern lifestyles and financial pressures mean most of the population rely on shopping ‘as they need it’ rather than having any reserve supplies at home.

The ease of which parts of a developed nation can descent into barbaric chaos shockingly quickly was demonstrated during hurricane Katrina in the US in 2005, which saw New Orleans slide into complete chaos for weeks, and even in the UK itself during the 2011 ‘London’ riots – which, over the course of 5 days saw widespread civil disorder spread from the capital to Birmingham, Greater Manchester, Merseyside, Nottingham, Bristol and several other areas including smaller towns.

Though the initial violence, in Tottenham, north London, was caused by the police shooting of Mark Duggan, the subsequent violence was mostly simple opportunistic looting and a kind of blind rage authority that spread like wildfire among the disadvantaged young especially. Order was only restored in the capital after the government flooded the streets with police drawn from all over the United Kingdom.

In a worst-case no deal Brexit scenario, there will be food, fuel and medicine shortages across the nation. Couple this with instant lay-offs and possible devaluation of the pound sterling leading to banking issues, and an already painfully divided nation and its easy to see that Amazon.com Inc.’s U.K. head, Doug Gurr’s warning is actually very reasonable.

A return to hostilities in Ireland?

Its also worth considering the very real possibility of open conflict breaking out in Northern Ireland. The region voted strongly to remain in the European Union during the 2016 referendum, and Good Friday Agreement, upon which the current peace is based, is dependent on there being no hard border between the north and the republic. As the north is part of the United Kingdom of Great Britain and Northern Ireland, Brexit looks certain to reintroduce a hard border.

The other possibility is that Northern Ireland holds a unilateral vote, unsanctioned by Westminster, and reunites with the south. Whether London would have the stomach to deploy troops to retain Northern Ireland is unclear, but given that Theresa May’s government is reliant on a deal it made with the Democratic Ulster Unionist party (who would surely be viciously against any reunification), it can’t be ruled out.

Northern Ireland may even see its electricity supply cut-off, as the current EU-based borderless market system may cease to function. As reported by many media outlets, including the  Belfast Telegraph, the UK government is making emergency plans to use thousands of military and requisitioned generators, placed on barges in the Irish Sea, to supply emergency power to essential services.

The Scottish question

Then there is the Scottish question. Despite voting to remain part of the United Kingdom during the last independence referendum in 2014, things have changed. During that referendum leaving the EU was not even remotely in anyone’s mind, and during the EU referendum Scotland voted, like Northern Ireland, to remain a part of the European Union. Recent polls suggest that should the independence vote be held now, it would might well deliver a different result.

With the pro-EU attitude of both the Scottish National Party, who dominate the Scottish Parliament at Holyrood, and the Scottish populace, coupled with the increasing possibility of a chaotic no-deal Brexit engineered by the parliament in London, England, it is not unlikely that Scotland may call another independence referendum, with or without the blessing of Westminster.

The possibility of a return to open conflict in Northern Ireland and a Scottish UDI are increasingly real. Interestingly, a recent BBC 4 radio drama played out a disturbingly similar scenario, in which, thanks to a chain of events sparked by a ‘no deal’ Brexit, the UK disintegrated into full scale civil war.

UK government paralysed as Brexit lies and fantasies laid bare

The repeated failure of Theresa May’s Conservative government to grasp reality, especially concerning the Irish border, and their general insistence on “having their cake and eating it,” is largely responsible for the UK marching headlong towards a chaotic exit from the EU.

Infighting between the fundamentalist Brexiteers like former Secretary of State for Exiting the European Union David Davis, former Foreign Secretary Boris Johnson and MP Jacob Rees-Mogg, who have clearly painted themselves into a corner with all the lies they told in the Brexit referendum campaign, and now know they must push Brexit through or go down fighting, and more moderate Tory MPs means that the government lacks the clout to push anything through parliament.

Brexit is not the “will of the people”

The whole Brexit farce must be seen in the light of the growing anti-Brexit attitude across the UK. Despite Theresa May and the Brexiteers repeatedly insisting they are carrying out “the will of the people,” nothing could be further from the truth.

For starters, the original referendum result was 52% – 48% in favour of leaving the EU, which is hardly a convincing margin for such a major change. Secondly, almost 30% of the electorate didn’t vote – perhaps because they didn’t realise exactly what was at stake.

Thirdly, two million young people, who Brexit will affect most, were not eligible to vote in 2016 but are now, and a large number of older people who did vote have passed away since. Many studies since 2016 have shown that the Leave victory was mainly due to older voters, with the young, even in England, voting overwhelmingly for Remain. Considering that Brexit won’t affect the dead, but will affect the young, this is patently ridiculous.

Fourth, and perhaps most alarming, the Vote Leave campaign during the referendum peddled outright lies. The infamous red bus for example, that claimed the UK gave £350 million a week to the EU, and promised to give it to the NHS instead, has been debunked many times, including by the Office for National Statistics.

Everyone saw people like David Davis and other Brexiters do interviews on Newsnight etc. where they said that the UK would “follow a Norwegian model” (i.e. remain in the single market and customs union – something that was taken off the table after Leave won), and claim that trade deals could easily be made to replace those lost by leaving the EU (again, something that simply hasn’t happened, and is proving next to impossible).

Of course, there are other glaring failures of democracy in the Brexit vote too, such as the ineligibility of 3 million citizens from the other 27 EU nations living in the UK, and many of the 1.5 million or so Brits living elsewhere in the EU, to vote – again, just like with the young, despite it affecting them the most.

Then there are the cases of illegal campaigning and fraud by vote Leave, especially regarding using undeclared and over-the limit funds to target key swing voters in online campaigns – cases that are already the subject of criminal investigations.

As a result of this, there is a growing cross-party anti-Brexit front, made up of a previously unheard of coalition containing Conservative, Labour, Liberal Democrat, Scottish Nationalists, Greens, Plaid Cymru and other MPs, and a rapidly swelling popular campaign that just days ago managed to organise a march of more than 700,000 through central London, calling for a second Brexit referendum.

However, in keeping with Theresa May’s trademark arrogance, she has repeatedly declared there will be no second referendum. So, in late 2018, the United Kingdom of Great Britain and Northern Ireland stands bitterly divided – perhaps more so than at any time in its history.

The Crown Dependencies

One area of uncertainty rarely mentioned when discussing Brexit is the Crown Dependencies. These consist of the Isle of Man, the Bailiwick of Jersey, and the Bailiwick of Guernsey (which itself consists of Guernsey, Alderney and Sark). These are not part of the United Kingdom of Great Britain and Northern Ireland, and have their own parliaments, but are regarded as British.

Both the Isle of Man and Alderney are hubs of the iGaming industry. Unlike Gibraltar, whose territorial status made it part of the European Union, the Crown Dependencies have never been part of the EU, though they are within the EU’s customs area. The Isle of Man (along with the UK) is currently within the EU’s VAT area too.

Exactly what a no-deal Brexit will mean for the Crown Dependencies is unclear, but a statement from the Isle of Man’s government website gives an idea:

“The Isle of Man’s relationship with the EU is dependent on the UK’s membership of the EU; when the UK leaves the EU, our relationship through Protocol 3 will cease. As a result, the Isle of Man could be affected by changes to our relationship with the EU regarding customs, and potentially VAT; we could face the imposition of tariffs on goods which are exported to the EU and other countries, affecting manufacturing, agricultural and fisheries products.

“There may also be implications for the free movement of people between the UK and the Crown Dependencies and the EU.”

The last part is particularly concerning for businesses, who relay on frictionless, convenient access through both the UK and Republic of Ireland (in the case of the Isle of Man) and France (in the case of the Bailiwick of Jersey, and the Bailiwick of Guernsey).

For all intents and purposes, the Crown Dependencies have functioned very much as if part of the UK, and as if part of the EU, when it comes to travel and infrastructure for many years. Quite how they can adapt to retain that closeness to both the UK and EU, whilst being a member of neither, in a post-Brexit world is difficult to imagine.

The future

Though there still remains the remote possibility of a last minute deal, it is looking increasingly likely that there will be a worst case ‘no deal’ Brexit.

The igaming and gambling industry has been rather nonchalant about everything Brexit-related until recently, with companies reaffirming their commitment to Gibraltar and nothing much said from those with interests in the Isle of Man and Alderney. But, over the last few weeks it seems to be slowly dawning on them that Gibraltar is not a safe bet anymore, if you’ll forgive the pun, despite the assurances from Spain.

Companies, including the likes of Bet365 and William Hill (with its acquisition of Mr Green – read about that here), are already preparing bases in the European Union state of Malta, and more are sure to follow over the next few months.

After all, given the potentially catastrophic economic, political and social fallout of a ‘no-deal’ Brexit in the UK itself, which could include the disintegration of the United Kingdom of Great Britain and Northern Ireland, promises and informal agreements made now might mean very little by this time next year.

One thing is for certain, if the UK does experience a chaotic exit from the European Union in March 2019, the same populist politicians and their propaganda machine, are sure to whip up even more anti-European sentiment, and they will have an even more angry and frustrated audience. If the ‘knives come out’ and European individuals and businesses in the UK are targeted, then UK businesses and individuals in the rest of Europe can expect a backlash.

As Guardian columnist Will Hutton pointed out back in June 2017:

“Britain is about to embark upon a national act of self-harm on an epic scale.”