Gibraltar Row Leaves Gambling Industry Between A Rock And A Hard Place

lewis rutledge
Written by Lewis Rutledge
Published on Monday 3rd April 2017, 12:38 pm
Posted in: Casino Legal

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The future of Gibraltar has emerged as one of the key debates as the formal process of Brexit begins, leaving the United Kingdom’s gambling industry watching on with interest. A number of the country’s top online operators have remote bases in the territory, so what could happen to them and what might be the impact on punters?

What’s Happening With Gibraltar?

Gibraltar has been caught in the crossfire following the UK’s decision to leave the European Union. The territory has been under British rule for 300 years and Gibraltarians are UK citizens, but Spain has continued to press its claim for sovereignty and the issue has now been highlighted as the UK and EU try to sort out a deal for Brexit. ‘Arrangements for Gibraltar’ are included among the European Council’s 26 core principles, with the EU allowing Spain a veto over decisions made involving The Rock. Gibraltarians overwhelmingly rejected the idea of Spain and the UK sharing sovereignty in a 2002 vote, and it was hinted by former Tory leader Michael Howard that Prime Minister Theresa May ‘would go to war’ to protect Gibraltar.

What Does Gibraltar Have To Do With The Gambling Industry?

A number of remote gambling operators choose to be based outside of the UK. While their businesses are still regulated by the Gambling Commission, they can take advantage of lower tax rates in other jurisdictions. Gibraltar, despite being a British territory, is self-governing in virtually all matters - including taxation.

The Gibraltar Regulatory Authority only considers applications from ‘blue chip companies with a proven track record in gambling’. Most of the established UK and Irish operators have a gaming licence from Gibraltar as well as the Gambling Commission, including Ladbrokes and Boylesports. William Hill and BetVictor are among other companies with registered offices in Gibraltar.

What Could Happen To Them?

There are a lot more discussions to take place before there is even a chance of Gibraltar being passed back to Spain. Another possibility might be one of shared sovereignty between the UK and Spain, in which case the taxation laws may stay the same and gambling operators would not have to worry. However, if it does happen that Gibraltar ends up under Spanish rule again one day, operators would have to consider moving elsewhere.

There are a number of other jurisdictions, such as Malta, the Isle of Man and Alderney, which offer similar advantages to Gibraltar. However, Malta is part of the EU and so that could be problematic for UK businesses after Brexit, and so a return to Britain may be the only option. The stricter taxation laws could drive up prices and make it harder for the operators, which in turn could lead to the odds and promotions being less enticing for punters as businesses bid to stay in profit. As the dispute unfolds, gambling operators are sure to keep a close eye on developments.

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