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Gaming
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equally we are alive to what I would term Brexit opportunism.”
As with financial services, the UK has guaranteed Gibraltar continued access to the UK market from March, through the Brexit transition period and beyond, and it is the only jurisdiction to have received such assurance. Lyman submitted: “We know operators are concerned about access to other European markets, but a cross-jurisdic- tional approach may be more sensible than putting all your eggs in one basket.”
Exposing Gibraltar’s nervousness at potential loss of key market players – and a possible knock-on reduction in its economic footprint – Lyman cautioned: “What I would say to our operators is hold your nerve and work with the Government and the [GD] in a transparent way to facilitate the contingent measures you need to take, without burning any bridges and leaving you able to access all existing markets.
Don’t be seduced
“Do not be seduced by what could be short lived financial and perceived technology advantages elsewhere and work with us to fashion the future,” he implored.
Large B2B operators with history, like NetEnt and Playtech, are licensed, but Foster identified: “There are a lot of start-ups involving people who have been in the industry for a long time generally in Gibraltar, and they want to set up new enterprises - they don’t want to move - but under the current licensing regime there is no way they are going to be
allowed to have a license. “I think we are moving to a situation where [GD] will start doing due diligence on the individuals in B2B start-ups and then license
them.” Minister Isola vowed recast gaming
charges will not lead to higher industry costs. Gibraltar gaming licenses are considered quite expensive, around £85,000 minimum each, including turnover tax, making for a maximum payment of some £425,000 and each firm has several licenses.
Lyman admitted: “The licensing bar is high, but in the future we will not automatically dismiss well-funded start-ups
with experienced management. I believe Gibraltar, with its concentration of technology and IP [intellectual property] can be an incubator for tech businesses.”
AML/CTF (Counter- Terrorism Financing) and consumer protection is key for all UK and Gibraltar major gaming firms, which account for some 80% of sports betting and much of UK gaming.
French cautioned: “The [UK] National Crime Agency is something we all have to be very aware of given the big amounts of money now
changing hands that will attract the interest of a far wider range of regulatory authorities, and compliance tightened.”
Foster believed having new regulators in both jurisdictions – Gibraltar’s Lyman and UK Gambling Commission’s chief executive, Neil McArthur - “will result in it being more easy for them to work together and achieve co-operation. There is no chance that Gibraltar’s regulatory body will give up its independence, because the operators genuinely don’t want that”, and some variation in approach can be expected.
Looking ahead, the largely untapped US market “could increase dramatically”, following recent US Supreme Court rulings. “North America represents a potential US$14bn opportunity in the near term should there be wholesale re-regulation or deregulation of the US market and to date most success there has been achieved by William Hill in Nevada, creating a world-class offer”, French maintained.
The US has little on-line gaming experience. “Yes, some people will go out, but key operations will remain in Gibraltar, so that there’s no risk of destabilising the rest of the business, or - as PartyGaming used to do - operate from here and run the US from Gibraltar,” Foster predicted.
Some firms operate Asian-facing operations from Gibraltar, “because the skill set built over time here, cannot be gained easily anywhere else. I don’t expect to see much in the way of relocation of personnel”, the GBGA director contended.
As Lyman noted: “I do not underestimate the challenges faced by the industry, but Gibraltar is, and can remain, a first tier regulatory jurisdiction for remote gambling, supporting a critical mass of operators in both the B2C and B2B sector.”
Ray Spencer
Simon French: sees regulatory & political risk
Andrew Lyman warns of ‘knee jerk risk’
Bet365 later justified its move: “Due to regulatory developments in various jurisdictions and the evolving global regulatory environment for online betting and gaming, we have decided to increase our existing presence in Malta, which provides a mature and robust regulatory environment for the industry.” The firm added: “The number of people reported as being relocated to Malta [1,100] is wholly inaccurate.”
As Foster, who also is digital regulatory compliance director for Ladbrokes Coral Group, explained: “We all know that if we want to passport our services into Europe after Brexit we are going to have another line, in
Malta probably, as the most welcoming of licensing regimes in Europe.
“But while Malta has a lot of people in gaming – second, third and fourth tier operators historically – I feel it doesn’t have the necessary skill sets and availability of people. First tier operators historically have only had a
very small base there.” It would be several years before Malta had sufficient numbers of skilled people – “it’s always a risk and I think Gibraltar is already in discussions with Malta about getting closer”, Foster revealed.
“Until the post-Brexit situation is known, no-one will be doing anything”, he maintained. “One firm was rumored to be leaving
last year and we all thought they were mad.”
Montegriffo disclosed: “Businesses obviously have to consider all potentialities and we are seeing some adopting a potential ‘Plan B’. All operators are different and each has distinct licensing and business models, but all will be review- ing what the outcome of different Brexit eventualities might be for them. We are very busy assisting with that process.”
Lyman accepted operators needed “to make contingency plans to deal with the Brexit risk and the advance of in-country regulation”. However, “moving people and technology in a knee jerk way carries with it a significant level of business risk and we are here to work with operators; not against them”, he emphasised. “We do not want to present operators with binary options, but
Moving now is madness, says GBGA’s Paul Foster
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Gibraltar International
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