'Brexit': What the future holds for Gibraltar-based gambling companies2016-06-28 12:17:04
British voters took to the polls. Europe woke up to the news that the British population decided to leave the European Union (EU). The so-called ‘Brexit’ became reality. Just how interconnected the world economy is, in all its aspects, manifests itself in questions that British-based gambling and gaming operators now have to ask themselves.
In Gibraltar, the British territory off mainland Spain, approximately 3.000 people are employed in the gambling industry. BetVictor, IGT, NYX Gaming Group and Ladbrokes are some of the many well-known brands that are Gibraltar-licensed.
Many employees of those gambling companies live in Spanish towns nearby the border. Brexit could result in employee’s crossing border controls twice on their daily commute. This, however, is the least of Gibraltar’s worries.
What will happen to the many formerly EU-licensed casinos that are now British-licensed? One commentator from GamblingInsider.com suggests that “Europe needs the UK more than the UK needs Europe.” The EU estimated that the EU online gambling market was worth around €13bn (£10.62bn) in annual revenues for 2015. The UK market, on the other hand, was worth approximately £3.5bn in 2015.
“If this trend were to continue when the effects of Brexit occur, and presuming that revenues and gross win can be taken as similar metrics, the EU is losing 33% of its market. Gibraltar is not losing touch with that 33% piece of the pie,” GamblingInsider outlines.
While this conclusion appears founded, it is questionable if gambling companies will leave it to the government and the EU to ensure that the larger market, the EU represents vis-à-vis the UK market, continues to be open to gambling companies.
Currently, there are no EU-specific laws concerning gambling. However, with increased European integration, the big gambling operators based out of British territories would be naïve not to consider other jurisdictions that offer equally favourable tax regimes as Gibraltar.
Most likely though, gambling companies based out of Gibraltar will not jump the gun. First, they will attempt to understand how ‘Brexit’ pans out. Then, action will be taken. Fabian Picardo, the Gibraltar’s chief minister, already spoke to Scotland's First Minister, Nicola Sturgeon, about the various options on separate EU membership for Gibraltar and Scotland.