Brexit The Catalyst For Gibraltar Exodus

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Brexit The Catalyst For Gibraltar Exodus ( Click to Enlarge )

In Britain, the continuing uncertainty over Brexit has already had a telling impact on a variety of industries, however online casinos have remained relatively unaffected – until now.

Gibraltar has long been the unofficial capital city of online casinos due to its attractive tax benefits, however its lingering status as an EU member has thrown a massive question mark across the region’s future financial direction. As things stand, betting companies can take advantage of low corporation tax and no VAT on marketing spend – a huge plus when looking at the explosion in TV and online advertising over the past decade.

Major Casino Brands

Bet365, Ladbrokes and William Hill are just some of the major names registered on ‘the rock’, but many of their contemporaries are now looking further afield, laying down contingency plans or even full-blown withdrawals from Gibraltar due to economic and regulatory fears.

How are online casinos responding?

In an ironic response to Brexit, a number of key online operators are shifting their affairs to autonomous Spanish regions, with Ceuta seemingly one of the most prominent beneficiaries.

The government of Ceuta, which can be found on the northern coast of Morocco, announced this week that Betfred is the latest major name to switch its digital platform, along with major Spanish firm Suertia and Italian casino, Mondobet.

Online Operations

As with any global business, the major draw for online casinos in Ceuta are the tax breaks. In 2018, Spain cut their national tax for online gambling companies to 20% but authorised Ceuta to offer a far lower bracket of just 10%. All they ask is that gambling companies relocate their tax base to the enclave, along with at least half of their digital workforce.

With Gibraltar due to leave the European Union along with the rest of the United Kingdom on March 29th 2019, the UK and, by proxy, Gibraltar will potentially lose access to the single market and existing tax breaks.

The Spanish government’s reaction further proves the continued importance of the gambling industry to the wider global economy.