If you are a dedicated online punter, then you will notice that most of the top betting sites online are actually based in Gibraltar, rather than in the UK or Ireland. Why have these companies made the move to this country, rather than staying based in the countries they were founded?
WHY GIBRALTAR?
If betting companies are not going to stay located in the country they serve, then why do they move to Gibraltar in particular? The biggest and most obvious reason is because of tax. If a betting company is located in Gibraltar, they do not have to pay the amount of tax that they would have to pay in the UK or Ireland.
Indeed, Gibraltar has very much become the gambling hub for these companies. It wasn’t always this way, because before 1989, it was simply a British overseas territory which was most well-known for the military presence there. Now though, you will find most of your favourite gambling brands located in Europort, Gibraltar’s business district.
The country offers a lot of different tax benefits to companies, including gambling and betting companies. For example, they have made marketing budgets VAT exempt, which will save a corporation a huge amount of money in one go, especially when you look at how many big brands advertise. Also, their corporation tax is 10%, rather than the 20% you would see in the UK. Of course, that is going to make the move to Gibraltar a lot more tempting.
NOT ALL COMPANIES MADE THE MOVE
While many betting sites saw the benefits Gibraltar offered them and made the move, not every betting company has shifted their base there. For example, big Irish brand Flutter, who operate brands such as FanDuel, SkyBet, Paddy Power, and more, have continued to remain in Ireland.
The company have done this even despite challenges thanks to the pandemic and its associated economic impact. While footfall in physical betting locations is still down from before pandemic numbers, they have remains in Ireland as it still offers them lots of benefits. For example, Ireland has very quickly become a technology hub, so the company can take advantage of that and improve their own services. They do seem to be the odd one out though, as recently more and more top-rated Irish bookies have switched to Gibraltar, with QuinnBet being one of the latest.
As you can see, moving to Gibraltar has brought a lot of tax benefits to the betting companies who made the move. However, with Brexit now changing the landscape, they may need to consider whether they need to move again.
WHEN DID THE MOVE TO GIBRALTAR START?
Betting companies being located in Gibraltar has not always been the case, so when did it start? In 1997, there was a tax increase being imposed on the betting industry at the time by the current Labour party. In response to this, betting company Victor Chandler decided to move the base of operations from the UK to Gibraltar.
Known as BetVictor now, Victor Chandler was a high-end betting company that was fully dedicated to high rollers at the time. It wasn’t well known by the public but even so you saw a lot of other betting companies very quickly following their lead.
The change in taxation was done to help increase the amounts of tax coming from the gambling industry. However, the exodus of companies to Gibraltar meant that changes had to be made. Rather than the proposed changes, a 15% of supply tax was put on any bookmakers gross profits, meaning that rather than the tax coming from the members, it came from the companies themselves.
BREXIT AND GIBRALTAR BASED BETTING SERVICES
Of course, now that Brexit has been passed through, there is the question of how this will affect the betting companies based there. Will they be able to stay there and still get the same benefits? For example, there is the question of whether a Gibraltar gaming license would still allow these companies to operate in other European Union countries. Plus, costs may start to rise, which will make it difficult for employees to remain living and working in the area.
Currently, living in Gibraltar is roughly the same as living in London, cost-wise. Many staff choose to live in Spain, so this could affect them if costs and licenses start to change thanks to Brexit.
