Gibraltar’s Post-Brexit Watch: Government, GBGA Attempt to Calm Industry Concerns
The ongoing fallout from the United Kingdom’s shocking “Brexit” vote to leave the European Union continues to impact the British protectorate of Gibraltar, and the ongoing health of the online-gambling business community that currently calls the little promontory its home.
Gibraltar, for those just catching up with the story, is a wholly unique jurisdiction with regard to the EU and that multi-nation group’s policies regarding free movement of trade and services. Dozens of major online-gambling firms relocated there over the past decade, lured there by Gibraltar’s access to the EU market. Back in the ’90s, with the backing of the UK, the tiny territory was deemed a “special EU economic zone,” and its government lured online operators there with a corporate tax regime featurng dwindling rates that allows most large companies to operate there all but tax free.
Flushdraw was among the very first outlets to point out the oversized impact that the United Kingdom’s pending exit from the European Union might have on those firms and Gibraltar’s online gambling industry as a whole, which even at minimal taxation rates, has been a great boon to Gibraltar’s economy. The odds-on betting choice, barring other political developments, is that many of these companies may find more relocating to another locale, quite possibly EU member state Malta, as a better long-term option.
It appears that a lot of those Gibraltar-based firms are thinking the same thoughts, and over the weekend, both the government’s Ministry of Financial Services and Gaming and the private Gibraltar Betting and Gaming Association [GBGA] have issued statements attempting to allay those fears.
First, from the protectorate’s gaming-friendly government:
Gaming Community – business as usual
HM Government of Gibraltar has been working closely with the remote gambling industry in Gibraltar following the Brexit vote last week and is pleased to confirm that the sector remains strongly committed to its Gibraltar operations.
Government has engaged with every Operator in Gibraltar as well as with the Gibraltar Gaming and Betting Association (GBGA) to assure them of our support and vision for this sector in the short, medium and long term. This has been universally welcomed and operators have made it clear to us that they remain fully committed to Gibraltar and business continues as usual.
HM Government of Gibraltar will continue to work with HM Government UK to ensure the best possible outcome from the ongoing discussions in the expectation that there will be little or no change to the current arrangements for those who live and work in or travel to Gibraltar, and all the indications are that it really will be ‘business as usual’.
In the past week, various Operators have confirmed their intention to continue with their expansion plans in Gibraltar including increasing or leasing new office space in Gibraltar, relocating parts of their existing business from other jurisdictions to Gibraltar, and ensuring recruitment continues apace.
The Gambling Act Review published earlier this year and now in the consultation stage will definitely be proceeded with and further expanded to ensure that our regulatory, licensing and tax regimes remain fit for purpose having regard to any new arrangements that Gibraltar may enjoy in the future.
While this Government and others believed that staying in the EU is the better choice for economic development and growth, any move away from the EU will provide new and different opportunities for our economy and we will ensure these are available to all our commercial sectors and Gibraltar remains a great place to locate a business.
And, from the GBGA:
We welcome today’s statement by the Government of Gibraltar. Our organisation and members have been co-ordinating closely with Minister Isola and his team in order to ensure we work together in this period of uncertainty.
As an organisation the GBGA supported the Remain campaign. However, we respect the fact that the recent referendum highlighted obvious concerns UK citizens have in the EU political establishment and project.
At the moment and for the foreseeable future there is no change to the existing legal and political framework that our operators work within. We also note that European countries already have widely different regulatory regimes and many require our operators to have local licences – the impact on our members is therefore likely to be minimal.
Periods of wide-spread political uncertainty highlight the need to be based in a territory that supports your business and sector at the highest level. We have a very supportive government and regulators. We have access to a wealth of human talent and experience in online betting and gaming. The UK and EU political crisis makes us keenly aware why Gibraltar remains a great place to do European and international trade.
Gibraltar is an internationally recognised success story and we intend to keep it that way.
As is usually the case in circumstances such as this, only time will tell. Both the protectorate and the online firms that operate there would love to continue the current business relationship, but the greater truth is that larger forces may simply render the current situation unworkable.
Gibraltar will be hard-pressed to maintain its full EU free-trade privileges as a protectorate of the UK, once the UK itself departs. All those trade agreements will be open for individual negotiations, but most other European governments view the online-gambling industry as it operates from Gibraltar as an unintended consequence of the EU’s larger goals, tending to do more harm than good to each nation’s desires. That’s why literally dozens of cases involving battles between EU-member-nation governments and online-gambling operators have dotted the European Court of Justice’s case docket, ever since the online gambling biz itself came to be.