Opinion - Gibraltar’s big hand: developments in the gaming sector

While Gibraltar’s robust gaming sector has long fascinated outside observers, a series of increasingly big mergers and the Rock’s bold legal endeavours on the pan-European level mean that now is a particularly exciting, and fluid time. Indeed, potential investors – and gamers themselves – must pay keen attention as the sector heats up, and as the legal framework governing it heads towards a climactic resolution.

If there is one place where all things gaming-related are happening, it has to be Gibraltar. In today’s gaming sector, developments are so fast that there is simply no chance to mull things over, and only those with a nimble mind can hold a hand.  Perhaps it is because Gibraltar is home to the major online gaming operators and is small enough to be dynamic and responsive to the needs of the industry, within a common law framework and in the European Union, that the flurry of activity is so palpable.  

With a European patchwork of gaming licensing and regulatory regimes as a backdrop, operators licensed and headquartered from Gibraltar have long realised that they need to remain bullish about their offering, defend it as a responsible and mature business operating within the parameters of the law and good market practice, and grow their critical mass to weather the continuous challenges.  

Over the past year, the news from this sector has reflected a continuous movement of strategic alliances and takeovers, some of which have not materialised and others that have or will become reality at a later date. The biggest of these is the proposed takeover of digital entertainment plc, news of which came only very shortly after there had been a failed bid by William Hill Online to acquire 888. Another household name in the industry, Ladbrokes – their online business is also headquartered locally – has just announced merger talks with Gala Coral, also based in Gibraltar. The other smaller but no less important deal announced was 32Red plc’s acquisition of Roxy Palace. Will this in fact make 32Red plc more attractive as the object of a takeover itself?  Time will tell, but experience suggests that we should probably bet on this. Stan James Online, licensed in Gibraltar, is another one on which we are taking a punt on. It appears that it has never been more apt a moment to say: “watch this space”.

Gibraltar’s gaming operators have long realised that they need to remain bullish about their offering

Nyreen Llamas Partner at Hassans International Law Firm

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Consolidation in the sector is not the only local development. Gibraltar has also welcomed a judgment handed down on 14 July 2015, in which the High Court of Justice of England and Wales has found that referral to the European Court of Justice (ECJ) will be necessary to consider the legality of a tax imposed by the UK on overseas gambling operators. The case involves proceedings issued by the Gibraltar Betting & Gaming Association (GBGA) to determine the lawfulness of the proposed point of consumption tax regime envisaged in the Finance Act 2014, and challenging it on the grounds of it being discriminatory and restricting the free movement of services contrary to EU treaty provisions. The judgment in favour of the GBGA found that the various European legal issues require a decision by the ECJ. If the tax is found to be in breach of EU law, HMRC may be ordered to repay all unlawful taxes it has collected. This is of course a very live issue and all stakeholders in the industry, particularly in Gibraltar, will be keenly awaiting the next development.

The jurisdiction has also embarked on a review of the legislative licensing and regulatory regime with a focus not on fixing something which isn’t broken, but on adding to the framework in order to entrench its continued success. Features of the review include seeking a more appropriate and workable licensing and regulatory framework for businesses in the B2B affiliate sector, a standardised regime of terms and conditions for licences, the setting out in statute of the licensing principles and objectives, and a general review of duty applicable to the various types of businesses in this sector. More definitive guidance is expected later on in the year.

Finally, it has not just been in the online space that there have been developments.  In May this year, a new bricks-and-mortar casino opened its doors to the public in Gibraltar. Gibraltar has only ever had one casino in the jurisdiction for the past couple of decades, and the new Casino Sunborn has been a welcome addition, offering an alternative gaming proposition aboard a newly-established five-star yacht hotel.

It has been a busy period for the sector, and whilst the rest of Europe is still dithering over how to handle the industry and the US is still largely intent on keeping tight restrictions on the online space, Gibraltar, which supports the industry in a mature licensing and regulatory environment, looks set to see much more activity yet.


Gibraltar’s gaming tax rate for fixed odds betting and online casino operators, capped at £425,000 annually (minimum annual tax of £85,000)


This article was published 12 October 2015
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