The application process for obtaining a gambling licence in Gibraltar will vary over the type of licence you wish to apply for, whether it is a remote or non-remote licence. You must provide a long-term plan for business operation and illustrate your skills in your industry if you wish to obtain a permit. You must also express a positive reputation in your work environment to receive a licence. The Licensing Authority will review your plans and work effort to determine if you are deserving of a licence for operation in Gibraltar.
There is very little potential for the growth of new land-based gambling sites in Gibraltar. Gibraltar currently has one licensed casino and multiple betting shops. Since there are territorial limits in Gibraltar over non-remote gambling activities, most gambling permit efforts in the territory are for remote operations.
There are no rules for how many gambling licences Gibraltar may issue. But the current policy for obtaining a licence requires operators to have a physical presence in some form and have the necessary physical equipment for the operation in Gibraltar. Therefore, there are fewer licensees in Gibraltar than most people may expect. Gibraltar also does not anticipate an increase in the number of available licences at any future point.
The legislation will allow anyone capable of applying to seek a licence to operate in Gibraltar. But the legislation also imposes multiple rules in determining if an operator will receive a licence for operation in Gibraltar. The main feature for any candidate to have is an actual presence with senior workers managing the operation and for the necessary technical equipment and infrastructure to be physically located in Gibraltar.
Steps of the
The application process for obtaining an online gambling licence in Gibraltar entails two steps. First, the Licensing Authority will review the initial application and determine if it meets the principles laid out for determining if an applicant is capable of handling a licence. The authority must endorse the applicant’s efforts before going to the second step.
The second step entails a formal application. The applicant must offer a suitable application form, a business plan, and an expression of the due diligence provided by the applicant group, any associated partners, and whatever gaming suppliers will support the service. The applicant must provide a GBP 10,000 fee during the application process.
The Licensing Authority will review these aspects surrounding each applicant and how one can run a gambling operation within Gibraltar. These factors for determining where an applicant is suitable for a licence are under Paragraph (4) of Section 1 of the Gambling Act:
The character of the person operating the business; the person must express honesty and due diligence in one’s work;
The person’s business reputation, including one’s financial status and background;
The long-term plan the operator has for the business, including what activities one wishes to manage;
The person’s experience in managing gambling-related activities, especially ones that work under the currently proposed licence;
The proposed ownership plan for the business, including a structure for the upcoming entity for how it will operate;
Details on the technical processes that would work under the licence, including ensuring the gambling activities can run smoothly;
An ability to keep a minimum required reserve to ensure that all gamblers will receive the prizes they win; these gamblers will earn their funds as necessary without interfering with the gambling operation’s activities;
Control efforts to prevent the website the licence holder operates from having obscene or indecent material or links to said content;
Practical controls to ensure people under a minimum age for gambling and compulsive gamblers will be unable to gain access to gambling-related activities on the website;
The conduct of the applicant or any person associated with the applicant; the conduct may be compared with behaviors expressed under similar licences issued in any comparable jurisdiction outside of Gibraltar;
How a business can identify money laundering and other questionable transactions, plus how to control these issues and prevent them from happening.
Sanctions For Non-Compliance
Regarding all non-remote betting and gambling operations and offices in Gibraltar, the licensee who operates these functions must maintain one’s licence based on the issuing conditions. For remote betting activities, the licensee must comply with all rules within the Act, one’s licence terms, and the Licensing Authority’s Codes of Conduct. These remote operators must follow the rules listed in the Remote Technical and Operating Standards for the Gibraltar Gaming Industry.
Part VIII of the Gambling Act includes enforcement rules for ensuring all licence holders continue to comply with the terms surrounding their licences and how they will continue to operate. Section 42 gives the government the power to investigate licence holders and to produce reports on their operations as necessary. An investigation may occur if the government suspects a licence holder is engaging in activities against or beyond the provisions listed in one’s licence or the Act. Investigations may also work if the holder is operating in ways that may harm the general public interest in Gibraltar.
Part VIII also gives the Licensing Authority the power to suspend or revoke licences. A Justice of the Peace has the power to give the Gambling Commissioner and potentially the local police the right to search an operator’s premises with a warrant.
The Gambling Act can levy substantial penalties on those who offer remote gambling services without seeking and obtaining the necessary licences and approvals. Such corrections may work for B2B and B2C operations. Following a summary conviction, an operator may pay a fine of up to GBP 5,000, be sentenced to up to three months in prison, or potentially both. A full conviction or indictment will result in a fine, imprisonment of up to one year, or both.
The Income Tax Act determines the taxation of all people and businesses in Gibraltar. The Tax Act is supported by additional legislation through the Income Tax Act.
The current corporate tax system for Gibraltar has been in operation since 1 January 2011. It uses a 10 per cent rate, but some parties may pay a smaller total in certain situations.
Gibraltar also transferred the EU Parent Subsidiary Directive to the Parent Subsidiary Company Rules 1991. The rules state that a parent company will not be liable for taxes in some cases surrounding dividend income paid from the subsidiary to a parent. A Gibraltar-based company that makes a dividend payment will not need to withhold tax in the process.
The Minister for Gambling also announced in his July 2018 Budget Parliamentary speech that as of 1 April 2018, there will be some alterations to the duties and fees that gambling operators in Gibraltar will pay.
These proposed rules are as follows as of 1 April 2018:
The gaming duty for B2C casino operators will be 0.15 per cent of the company’s gross gaming yield (GGY). Chargebacks are not included in this total. The operator will pay the duty paid each quarter based on whatever management accounts may work. There are no other GGY discounts available.
The betting duty that B2C bookmakers must pay is 0.15 per cent of the gross margin, or the gross betting yield (GBY). The total does not include any voided or refunded bets. The B2C entity will pay the betting duty each quarter based on the reports in the management accounts. There are no additional GBY discounts here.
Betting exchanges or intermediaries will pay a duty of 0.15 per cent of the commissions they receive. These will be paid each quarter according to what management accounts report. There are no discounts available from commissions.
Operators will not have to pay a duty on the first GBP 100,000 in revenue they collect.
A business will pay an annual B2C licensing fee of GBP 100,000 for each licence category one holds. Licences are available in three categories as listed above. A B2C permit allows a business to conduct B2B-related actions.
A B2B operator must pay a licensing fee of GBP 85,000 each year. A B2B licence only allows the operator to supply its services to its commercial partners. The licence does not focus on any gambling-related activities that the business could wish to operate.
All licensing fees must be paid each quarter alongside any quarterly duty payments one would spend.
B2B licensees will not deal with any gaming duties. These licensees will pay an annual licence fee of GBP 85,000 for their operations.
You can contact us at PFSER if you need help managing your gambling operations in Gibraltar. We at Private Financial Services have been proud supporters of Gibraltar’s online gaming industry since the beginning. We currently advise various gaming operators in Gibraltar and can guide you through the licence application process. We can also assist you with multiple aspects surrounding taxes, insurance, banking efforts, mergers and acquisitions, how you can protect your data, how you can find employees, and many other factors for operation.
If you suppose that Gibraltar is not the right place to proceed with authorization then we can assist you in many other jurisdictions like Isle of Man, Malta, Estonia or Curacao.