Brexit on Gibraltar Gambling Industry is Imminent

The United Kingdom is almost exiting the European Union. This impending departure from the regional and economic bloc is intended to inflict adverse consequences on the gambling industry in Gibraltar. This is because Gibraltar is under the domain of the United Kingdom.

 

brexitIn case Brexit goes through successfully, then firms that are located in the UK but which would wish to gain access to the EU market will have to make individual applications to this effect. This will further complicate issues for the various gambling operators. They will also forfeit the privileges that come along with the Mini One-Stop-Shop (MOSS Scheme). They will not be able to supply services and goods to the European Union except they register for it.

 

The reasons that underlie these likely adverse negative consequences are many. For one, the firms that are located in the United Kingdom shall no longer have access to the huge European Union market. This, of course, shall translate to reduced revenue inflows.

 

In response to these dangers, Gibraltar has decided to put in place certain intervention mechanisms. The city-state has decided to lower its tax revenues from gambling yet at the same time raise its license fees on gambling companies.

 

Many firms have also decided to take matters into their own hands. They have for instance decided to offload some of their operations to localities that are still within the jurisdiction of the European Union. The most notable examples of these are the Bet365 and 888 Holdings.

 

The issue is yet to be resolved conclusively though. This is because the Brexit deal has yet to be finalized. Moreover, various stakeholders within the gambling industry are still pushing for certain concessions to be made and guarantees approved.

 

As stated, Gibraltar has lowered its tax rate from gambling revenue. Before the Brexit talks commenced, the nation-state levied 1% tax rate on the revenue from gambling. It has reduced this rate drastically to a paltry 0.15%. This has given many firms that operate in the area some incentive to keep staying on the island despite the impending exit of the United Kingdom from the European Union.

 

On the same note, the nation has increased the license fees on new gambling firms. For instance, the business-to-business corporate entities are now supposed to part with $112,000 (£85,000) while their business-to-consumers are required to pay $132,000 (£100,000) for the license.

 

Given that license fees are a one-time expense, this increase is very unlikely to inflict a significant rise in the cost of doing business. On the contrary, it shall enable the state to make up for the anticipated loss of tax revenue at least in the short run.

 

In response to these latest developments, Bet365 has already indicated the intention of relocating to Malta. The Minister for Financial Services of Gibraltar, Mr. Albert Isola, has however downplayed this move. He maintains that Gibraltar still has the capacity to weather the storm and secure its financial standing even if the UK withdraws from the EU.

 

Some stakeholders have even contemplated looking up to the World Trade Organization for a guidance on the way forward. They draw their inspiration from the Case that pitied Antigua on the one hand and the United States on the other hand. The World Trade Organization did step in and offer an amicable solution.

 

This stand has mainly been inspired by the fact that service industries, of which gambling is part, has largely been given a wide berth during the ongoing Brexit negotiations. They also decry the complex nature in which the payments from gambling will have to confront. It will be interesting to see just how the issue will ultimately be resolved.

 

UK Betting Firms Under Probe Following the World Cup Fallout

During the just-concluded 2018 FIFA World Cup, many people and households complained about being bombarded with betting and gambling adverts. Much of the complaints have concerned the intrusive nature of those adverts.

 

world cupMany have claimed that the adverts ate a few of their live matches. A number of the complaints have concerned the urgent manner in which the advertisers have wanted their target audience to bet. In light of this, a whopping 115 have forwarded their complaints to the Advertising Standards Authority.

 

An independent study by the Guardian deduced that on average, UK viewers were exposed to around 90 minutes of betting adverts throughout the four-week tournament. The research also pointed out that most parents were uncomfortable with the fact that their children were exposed to such adverts.

 

This, they argued had the impact of normalizing gambling and inducing their young ones to the practice before they are old enough to do so. Lastly, there was also concern among viewers of the way in which the betting firms push their message. Most they said used pressure tactics that made them respond impulsively. There was some unanimity among the viewers that some appropriate actions be taken in response to this menace.

 

In light of these allegations, the UK advertising watchdog has instituted official investigations. The main target is the Bet365, Carol, and William Hill which has been identified as the greatest culprits. They have allegedly broken the new rules that were put in place to put a halt on problem gambling.

 

These three firms have been noted to have crossed certain boundaries. The formats they use and the messages they have used have particularly been identified and being way off the mark. These approaches are not recommended for gambling adverts as they tend to encourage problem gambling.

 

The UK advertising watchdog is currently evaluating those complaints to ascertain the grounds on which to institute formal investigations. They are particularly going to deduce whether the tactics that were used by those companies indeed violated the advertising codes of the United Kingdom.

 

The advertising watchdog is expected to follow the footsteps of its Australian counterparts in charting the way forward. In light of this, it is anticipated to recommend a variety of steps to be taken in response to the menace. It may, for instance, recommend an overhaul of the existing laws, an alteration of the mandate of the advertising watchdog, and the penalization of the at-fault betting firms.

 

The UK advertising watchdog has no jurisdiction to oversee the number of adverts which appear in the FIFA World Cup matches. This is because such matches fall outside the mandate of the rules which govern gambling companies and their adverts, especially towards small children. It is therefore interesting to see its recommendations as regards the way forward.

 

This being the case, the Advertising Standards Authority shall only be to determine whether the said betting adverts which featured live odds broke the new rules that we put in place in February. It will also seek to determine whether the firms encouraged the menace of problem gambling.

 

Farther afield, many other nations have already started taking this path. Italy, for instance, has already started putting in a legal framework to completely ban gambling adverts. Its Minister for Labour and Economic Development, Luigi Di Maio has taken the lead on the issue.

 

He noted that whereas the practice of gambling generates plenty of tax revenue to the government, its grave societal repercussions far outweigh the tax revenues. He further termed it as a disease which has to be eliminated by all means. These steps shall take effect from January 2019 despite opposition from a number of betting firms.