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Offshore betting sites: Understanding the key provisions of Gibraltar gambling licensing regime

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Gibraltar is a British Overseas Territory located at the southern tip of the Iberian Peninsula, sharing a border with Spain. Despite being British, it has a separate political and legal system, making it a self-governing jurisdiction with its own parliament. The political status of Gibraltar is a source of occasional tension between the UK and Spain, as the latter has long sought to reclaim sovereignty over the territory.

The appeal of Gibraltar for offshore gambling sites lies in its favorable regulatory environment. Gibraltar has established a robust legal framework for online gambling, offering a well-regulated and stable platform for operators. The jurisdiction is known for its low corporate tax rates, making it attractive for businesses seeking a favorable financial climate. The principle legislation, the Gibraltar Gambling Act, 2005 is based on the UK Gambling Act, 2005.

Also read: Reasons for offshore gambling websites choosing Malta as base

Furthermore, Gibraltar’s membership in the European Union until Brexit provided operators with access to the European market under a single license. This facilitated the expansion of online gambling services to various EU countries.

In addition to regulatory advantages, Gibraltar’s English-speaking population, skilled workforce, and modern telecommunications infrastructure contribute to its appeal for offshore gambling companies. The combination of these factors has positioned Gibraltar as a key hub for the online gambling industry, drawing operators looking to offer services globally, including in countries like India where there’s a significant demand for online gambling. These sites although illegal in their country of operation rely on licenses, registrations obtained from Gibraltar to gain user trust.

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All licensing and regulatory matters in Gibraltar are determined by the Licensing Authority which is the Minister for Gambling. Following the licensing process, all subsequent regulatory aspects fall under the jurisdiction of the Gambling Commissioner and their regulatory team.

Types of gambling licenses in Gibraltar

Gibraltor currently offers two kinds of licenses i.e., non-remote or remote. Granting licenses for land based casinos is rare and the region has only two licensed casinos locally as of date and a number of betting shops.

Under the current licensing regime, non-remote operators are required to have physical presence with basic equipment in the jurisdiction. The law also requires key officials are based out of Gibraltar. This requirement ensures the operators are not fly by night operators and are serious about the business. This requirement for having physical presence in way is considered as a drawback when compared with other jurisdiction that have more lenient requirements.

As per the official website, the Licensing Authority has traditionally only considered licensing blue chip companies with a proven track record in gambling in other jurisdictions and will also consider the licensing of appropriately funded start-ups and expanding operations proposing to relocate wholly or partly from other jurisdictions.

Fees for offshore operators licensed under Gibraltar Gambling laws

There is a £10,000 fee payable on application and a £2,000 annual renewal fee. Additionally, the operators are subject to gambling duty under the Gambling (Duties and Licensing Fees) Regulations 2018:

Duty Rate Exemption
General Betting Duty 0.15% The first £100,000 of the operator’s gross betting profit on bet receipts in each year.
Betting Intermediary Duty 0.15% The first £100,000 of the operator’s gross profit on betting event revenues in each year.
General Gaming Duty 0.15% The first £100,000 of the operator’s gross gaming yield on gaming receipts in each year.

 

On day to day operational aspects, the Gambling Commisioner lays down Codes of Practice, AML requirements which the operators are mandatorily required to comply with.

The Gambling Act imposes significant penalties on the remote gambling services for violations of the legal requirements by the operators.

On summary conviction penalty may include a fine of up to £5,000 or a maximum of three months in prison, or both. On conviction or indictment, there can be a fine or imprisonment for a term not exceeding one year, or both

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