In order to prepare for the expected changes in the wake of Brexit, and particularly in the event that the worst-case scenarios play out as a result of the shift in the global economy, a number of industries have had to implement significant changes and cost reductions. Gibraltar, which is immersed in the gambling industry, has chosen to reduce gross revenue taxes on gambling companies in a futile attempt to retain both foreign and domestic operators. In order to make up for the large deficit caused by the budget cutbacks, license fees have been marginally increased. Overall, a great deal of relief is on the horizon for operators, with participants likely to reap the benefits. In general, operators provide participants with tax relief in the form of enhanced product and bonus offerings.
Already In Effect Relief
During his budget speech last week, Gibraltar’s Minister for Financial Services and Gaming, Albert Isola, announced that the changes to the tax structure were already in effect and that casino gaming operators and sports betting operators are now paying 0.15% levies on their annual gross taxable revenue income, as opposed to the 1% tax that was previously charged. Isola affirmed that the government of the country had considered a variety of alternatives to the flat rate that has been in effect since 2005. The minister acknowledged that license fees were now more expensive, but this was evidently a necessary evil in order to avert significant adverse financial consequences. He noted that whenever changes were made to taxation structures, both gains and losses would result.
Adapt Or Die
Isola concluded by stating that despite the fact that Gibraltar’s remote gambling industry was the dominant force in all of Europe, the country was now facing powerful winds and would need to navigate carefully in order to survive. Brexit has created market uncertainty that cannot be ignored. EU market access faces numerous obstacles, and markets in countries like Gibraltar must adapt or perish. Currently, approximately thirty licenses for remote gambling are held by companies functioning in the country. Cryptocurrency and further developments in terms of industry proposals are currently receiving a great deal of government attention, with all avenues being investigated as a potential means of alleviating a perilous situation that could potentially destabilize any economy.