Gibraltar is set to implement a new, tiered system for gambling licence fees, meaning that larger operators will pay more and smaller ones less, as part of a package of reforms for the point-of-supply market.
The British Overseas Territory launched a consultation on new licence fees, following its earlier proposal for a new Gambling Act.
Previously, operators of remote betting, remote gaming, other remote products, land-based gaming and retail betting each had to pay a £100,000 licence fee every year. B2B suppliers, meanwhile, were required to pay an £85,000 annual fee.
However, in its consultation, the government said that “licensing fees for startup operators and small operators who are building for growth can be a disproportionate cost in the early stages of the life cycle of the business”.
As a result, it opted for a new, tiered system for remote betting and gaming licences, based on annual gross gambling yield (GGY).
As operators need to apply for a separate licence for each major gambling vertical they operate in, the tiers are based on gross gambling yield within those tiers. As a result, an operator’s revenue from sports betting does not impact the tier they are in for a gaming licence.
For both betting and gaming, operators with an annual GGY of more than £300m within that vertical must pay a £200,000 licence fee. For those bringing in up to £300m but more than £20m, the fee is £100,000. For operators with a GGY of up to £20m, the fee is £50,000.
A further change to the licence structure is the introduction of a betting intermediary licence for exchanges and similar businesses. This will carry a £100,000 licence fee regardless of business size.
Lotteries will also have their own licence, which again is £100,000 regardless of size.
Affiliate licensing
A new type of licence will be introduced for marketing service providers, including affiliates. This will carry a £50,000 annual fee.
However, it will only apply to businesses that conduct marketing services “in or from Gibraltar”, rather than applying to any affiliate that aims to promote Gibraltar-licensed B2C sites.
B2B licence fees
The B2B licence structure will undergo more changes. Instead of a single supplier licence, aggregators and software suppliers will have different types of licence.
Aggregators within one vertical – such as betting, RNG Gaming, lottery or live casino – will pay £85,000 per year, plus 1% of the revenue that it makes from Gibraltar licence holders’ operations.
“This is intended to capture additional fee income from the revenue of the content providers themselves, so the proposal assumes that aggregators will pass this on their hosted content providers through their charging mechanism,” the government said. “We welcome discussions with aggregators on business model impact.”
If they offer more than one gambling vertical, aggregators will have to pay an additional £15,000.
A software supplier, including a betting or gaming platform provider (but excluding B2C businesses that use an in-house platform) will also have access to three tiers of licence.
A tier-three licence would allow for platforms with less than £200,000 in sales from Gibraltar licensees or no more than two approved integrations with Gibraltar-licensed B2Cs. It would cost £20,000 per year.
A tier-two licence – with an annual fee of £50,000 – allows sales of up to £550,000 or no more than three approved integrations.
If a platform provider is above these thresholds, it must apply for a tier-one licence, which carries an annual fee of £85,000.
Betting data providers and suppliers of other B2B services such as compliance or anti-fraud products will each have their own licences, with one £50,000 annual fee regardless of business size.
Other licences
Elsewhere, “holding entities” based in Gibraltar – for companies doing business elsewhere – are also subject to a £50,000 licence fee. The government said this is “regardless of where in the ownership structure the Gibraltar-linked holding entity features”.
Entities that hold or manage customer funds – but are not otherwise covered by one of the other types of licence – must also pay a £50,000 licence fee.
Point-of-supply reforms
The new Gambling Act proposed in June was mostly focused on establishing a local presence for Gibraltar licensees, including a requirement that licensees should have a “sufficient substantive presence” in Gibraltar.
It comes as other major point-of-supply markets are considering reforms of their own. In Curaçao, work is being done to completely overhaul the entire online gambling regime, with higher barriers to entry and the ability to cooperate with other regulators to tackle illegal gambling, as well as an end to master licences.
Malta, meanwhile, is hoping to bring in “detailed player protection guidelines for licensees”, having opened a consultation on the subject.
