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Gibraltar will replace flat-rate licence payments with a tiered structure

As part of a package of reforms for the point-of-supply market, Gibraltar will establish a new tiered structure for gambling licence payments, meaning that larger operators will pay more and smaller ones will pay less.

Following its prior proposal for a new Gambling Act, the British Overseas Territory opened a consultation on new licence fees.

In the past, operators of remote betting, remote gaming, other remote products, land-based gaming, and retail betting were required to pay an annual licence fee of £100,000. Meanwhile, B2B vendors were asked to pay an annual fee of £85,000.

Nevertheless, the government stated in its consultation that "licence costs for startup operators and small operators who are preparing for expansion can be a disproportionate cost in the early stages of a business's life cycle."

Consequently, it decided for a new tiered system for remote betting and gaming licences, based on annual gross gambling yield (GGY).

The levels are based on the gross gambling yield within each tier, as operators are required to apply for a separate licence for each major gambling vertical they operate in. As a result, an operator's sports betting revenue has no bearing on the tier for which they qualify for a casino licence.

For both betting and gaming, operators with an annual GGY of above £300 million within that vertical must pay a licence fee of £200,000. The charge is £100,000 for those who bring in up to £300 million but more than £20 million. The cost is £50,000 for operators with a GGY of up to £20 million.

A third modification to the licencing system is the creation of a betting intermediary licence for exchanges and similar organisations. This will incur a licence charge of £100,000 regardless of business size.

In addition, lotteries will require their own licence, which will cost £100,000 regardless of size.

Licensing for affiliates

There will be an introduction of a new type of licence for marketing service providers, including affiliates. This will incur an annual cost of £50,000.

However, it will only apply to enterprises who conduct marketing services "in or from Gibraltar," and not to affiliates promoting B2C sites licenced in Gibraltar.

Business-to-business licence fees

The B2B licence structure will undergo additional modifications. Instead of a single supplier licence, aggregators and software vendors will have multiple licence types.

Aggregators within a single vertical, such as betting, RNG Gaming, lottery, or live casino, will pay £85,000 per year in addition to one percent of the revenue generated by Gibraltar licence holders.

“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 aggregators offer more than one gaming vertical, they will be required to pay an extra £15,000.

A software provider, including a betting or gaming platform provider (but excluding B2C enterprises that employ an in-house platform), will also have access to three licence tiers.

A tier-three licence would be granted to platforms with less than £200,000 in annual sales from Gibraltar licensees or with no more than two approved integrations with Gibraltar licenced B2Cs. This would cost £20,000 annually.

A tier-two licence, which costs £50,000 annually, permits sales of up to £550,000 or no more than three permitted integrations.

If a platform provider exceeds these levels, it must apply for a tier-one licence, which costs £85,000 annually.

Betting data providers and providers of other B2B services, such as compliance or anti-fraud products, will each have their own licences with an annual charge of £50,000, irrespective of the size of the business.

Other licences "Holding entities" based in Gibraltar — for firms conducting business elsewhere – are also required to pay a £50,000 licence fee. The government stated that this is the case "regardless of where the Gibraltar-affiliated holding corporation appears in the ownership structure."

Entities that store or handle customer funds, but are not covered by any of the other licence types, must additionally pay a £50,000 licence fee.

Supply-point reforms

The June proposal for a new Gambling Act centred primarily on establishing a local presence for Gibraltar licensees, including a requirement that licensees have a "sufficient substantial presence" in Gibraltar.

It occurs at a time when other significant point-of-supply marketplaces are contemplating reforms of their own. Interact is already underway in Curacao to fully restructure the entire online gambling regime, which will include increased entrance barriers, the capacity to work with other regulators to combat illegal gaming, and the elimination of master licences.

Malta hopes to implement "detailed player safety guidelines for licensees" after opening a consultation on the subject.



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