Gibraltar, a well-established hub for the online gambling industry, has been confronted with challenges stemming from Brexit and increasing global competition. With 47 licensed operators, including major names such as Betfred, bet365, and Lottoland, the gambling sector remains crucial to Gibraltar’s economy, accounting for 20 percent of its GDP. In the 2023/2024 fiscal year, gaming-related revenues contributed approximately £15 million, about two percent of the territory’s overall government income.
Adapting post-Brexit
Brexit, which took effect in 2020, disrupted Gibraltar’s access to the European Union, impacting its gambling industry. Around 72 percent of Gibraltar’s licensees focus on the UK market, but Brexit introduced complications, particularly for the 14,000 workers who cross the border with Spain daily. Without a firm border agreement between Gibraltar, Spain, and the EU, these disruptions remain a concern for businesses and the territory’s economy.
In response to Brexit uncertainties, some companies began hedging their bets early. For example, in March 2018, Evoke (formerly 888 Holdings) applied for a gaming licence in Malta, citing concerns over the impact of Brexit on Gibraltar. Despite this, several of its brands, including 888casino, have retained their headquarters in Gibraltar.
Moving away from the “grey market” reputation
Gibraltar’s favourable tax regime has long made it an attractive destination for gambling and financial services. This has brought scrutiny from international bodies and foreign governments, who have called for more transparency and stricter regulations to prevent issues like tax evasion and money laundering.
In June 2022, the Financial Action Task Force (FATF) placed Gibraltar on its ‘grey list,’ citing deficiencies in its enforcement of anti-money laundering (AML) regulations and the execution of final confiscation orders.
This designation, along with Gibraltar’s diminished role as an entry point to the EU market following Brexit, has prompted the territory to take proactive steps to distance itself from its “grey market” reputation.
Gibraltar is focused on improving its reputation as a legitimate and well-regulated jurisdiction. Under the new Gambling Act, licensees must establish a “sufficient substantive presence” in Gibraltar, ensuring that businesses based in the territory are properly regulated and do not engage in unregulated markets.
Gibraltar has stressed that its licensees must operate within the legal frameworks of the markets they target. Andrew Lyman, Gibraltar’s Gambling Commissioner, explained: “We don’t see ourselves as a jurisdiction that supports the black market in any way. If I found a company in our jurisdiction targeting a market without a licence, I would take steps to stop that”.
After implementing significant reforms to its AML and counter-terrorism financing regime, Gibraltar was removed from the grey list in February 2024.
Strengthening the regulatory framework
Gibraltar is continuing to improve its gambling regulations to grant the Gambling Commissioner expanded powers. Expected to be enacted in early 2025, new legislation will move away from the current binary enforcement model, which offers limited choices between licence suspension and fines, especially in anti-money laundering (AML) cases.
This change comes after several high-profile AML breaches, such as Evoke paying a £2.9 million fine in August 2023 for violations involving VIP gamblers in the Middle East. This followed a larger £9.4 million penalty from the UK Gambling Commission for similar offenses, stressing the urgency for stricter regulatory measures.
Nigel Feetham (pictured above), Gibraltar’s Minister for Justice, Trade, and Industry, clarified that the updated regulatory regime will ensure compliance without being overly burdensome. Key positions such as chief executives, financial officers, and compliance heads will be subject to more stringent oversight, improving accountability within the sector.
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