Mischon de Raya Issues Brexit Notice To Online Gambling Partners

A notice to its online gambling partners has been released by London law firm Mischon de Reya outlining more Brexit questions about data privacy rights, workers jobs and service contracts affecting the industry.

When adjusting to the UK’s post-EU future, online gambling has experienced less friction than other sectors (travel, exports, entertainment) as the majority of operators undertook substantial organisational changes during the Brexit transition phase.

‘Trade and Cooperation Agreement’

While the UK and the EU have agreed on the terms of a ‘Trade and Cooperation Agreement’ (TCA), for their potential business partnership with the UK and Europe, gambling companies also face uncertain consequences.

The UK and EU are yet to agree on a final ‘post-Brexit data security system’ of paramount importance, a crucial agreement covering all data transfers involved in digital trade.

Bridging period

At present, a four month’ bridging period ‘has been given to UK companies, which is extendable by two months, with the EU Commission expected to take an’ adequacy decision ‘with regard to the potential technical arrangement on data transfers in the UK.

Mischon de Reya said: “If, however, the EU does not accept that the UK’s data protection regime is adequate following the bridging period, contracts which involve the transfer of personal data from the EU to the UK may need to be revisited –  to reflect the guidance issued by the European Data Protection Board, after the Schrems II decision, in relation to international data transfers.”  

Absence of a long-term data transfer arrangement

The London law firm upholds the recent industry alert released by the European Gaming & Betting Association (EGBA) by the EU trade body, which reported that the absence of a long-term data transfer arrangement between the UK and the EU is the ‘most important outstanding Brexit issue’

Noting possible business interruptions, Mischon warned gambling partners to perform an individual review of their ‘intra-group and external contracts’ and how they would be affected if the EU found the data protection regime of the United Kingdom to be insufficient.

“Businesses should also consider the extent to which they will continue to transfer personal data across UK and EU borders,” it said. “If processing operations in relation to a customer take place in both the EU and the UK/Gibraltar, there is a risk that any data protection breach could result in overlapping investigations, and two sets of fines.” 

Despite the United United Kingdom securing a TCA with the EU to ensure continued tariff-free trade in goods, Mischon stressed that gambling companies need to recognise that the United Kingdom will be regarded as a third country outside the arrangements of EU member states.

Safeguarding job contracts

Mischon advised its partners to ensure that job contracts are safeguarded, as operators should be prepared for “the fact that employees may not be able to relocate across the EU border without some degree of friction.”

Despite the United United Kingdom securing a TCA with the EU to ensure continued tariff-free trade in goods, Mischon stressed that gambling companies need to recognise that the United Kingdom will be regarded as a third country outside the arrangements of EU member states.

Mischon advised its partners to ensure that job contracts are safeguarded, as operators should be prepared for “the fact that employees may not be able to relocate across the EU border without some degree of friction.”

TCA largely silent on services

Echoing broader business concerns, Mischon said that, as the ‘TCA is largely silent on services’, operators should review their current professional service contracts covering the EU.

Although a number of professional services agreements are still subject to ongoing negotiations in the United Kingdom and the EU, each individual state which decide the future results of how they wish to accommodate UK business.

Mischon concluded his statement by urging partners to become aware of possible amendments to the “tax residency rules” for companies, as Member States are likely to argue that “a business with a majority of directors in a particular EU state is tax-resident in that state.”