The new taxation regime has already taken effect and Minister Isola said that companies that would be most affected by it had been warned well in advance to prepare to it.
The politician elaborated that they have been considering different models to replace Gibraltar’s “flat rate” on gambling that companies have paid since 2005, when the British Overseas Territory adopted its Gambling Act.
Under the new regime, B2C gambling companies will pay a 0.15% tax on their annual gross receipts. The tax applies to both sports betting and casino gaming operators. These used to pay a 1% tax. Turnover was the tax base for sports betting companies, while casino operators were taxed at 1% of their gross gaming yield.
In addition, new annual license fees have been introduced by the Gibraltar government. B2B companies will have to pay £85,000 for each license they hold, while B2C companies will annually pay £100,000 for each of their licenses. The fees are substantially higher than the ones previously charged, the Gaming Minister admitted.
Minister Isola also acknowledged that there would be both “winner and losers” as a result from the new regime, but he ensured that the ones most affected were warned and provided with reasons for the changes well in advance.
Brexit and Consolidation Concerns
According to Minister Isola, the probability for a hard Brexit remains low, but the politician still pointed out that this scenario would have a big impact on Gibraltar’s gambling industry.
As for the ongoing consolidation in the industry, the Gaming Minister noted that the territory has lost several licensees as a result from recent mergers and acquisitions and expects more deals affecting the local industry to take place in the next few months and years.
Gibraltar’s gambling industry currently employs 3,500, with the bulk working in the remote sector. Minister Isola said during his budget speech that the government has been working closely with companies to make sure that a regulatory and licensing framework is crafted that works best for all involved parties and keeps jobs and the territory’s status of a popular gaming hub.
Reports emerged earlier this year that online gambling giant bet365 was preparing to relocate its Gibraltar operations to Malta due to the uncertainty clouding the British territory’s future in post-Brexit Europe. It later on became known that bet365 was indeed planning Malta expansion, but not at the expense of its Gibraltar operation.
Minister Isola also confirmed that the UK Government has promised Gibraltar that it would be granted access to UK’s remote gambling market after Brexit. The British territory is actually the only jurisdiction to have been promised such access.
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