Brexit data warning issued to betting operators by Mischon de Reya

Online gambling partners of Mischon de Reya have been issued a warning by the legal firm regarding the impact of Brexit on data protection, staff employment and service contracts.

Despite the UK’s withdrawal from the EU, the two have yet to agree on a final ‘post-Brexit data protection regime,’ a vital agreement that would govern all data transfers within the digital sphere.

Although a Trade Cooperation Agreement (TCA) has been agreed upon, gambling operators still have concerns about the future business relationship between the UK and the EU.

Many operators undertook significant operation changes during the Brexit-transition period, and so for the most part the online betting sector has faced less difficulty than other industries, such as travel, exports and entertainment.

However, London-based Mischon has pointed to a warning issued by the European Gaming & Betting Association (EGBA), the EU trade body specialising in the gambling sector, which identified the potential absence of a long-term agreement regarding data transfers between the UK an EU as ‘most concerning outstanding issue with Brexit’.

“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,” the law firm said in a statement.

“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.”

The company has raised further concerns to its gambling partners surrounding individual assessments of ‘intra-group and external contacts’ and how they would be impacted should the EU reject a British data protection regime as insufficient.

Gambling companies have been urged to understand that the UK will be treated as a third country outside of EU member state regulations and procedures despite securing a TCA with the EU.

Future outcomes between EU member countries and the UK may also be determined by individual governments despite a number of professional service arrangements still being subject to ongoing discussions..

The safeguarding of employee contracts has also been highlighted by Mischon, which argued that operators should be prepared for the “fact that employees may not be able to relocate across the EU border without encountering some degree of friction”.

Operators have been further encouraged to review existing professional service contracts covering the EU due to the TCA being ‘largely silent’ on this issue.

The firm closed its statement by encouraging partners to make themselves aware of potential changes to business ‘tax residency rules’, as member states will likely argue that ‘a business with a majority of directors in a particular EU state is tax resident in that state’.