Speech at the Gibraltar e-gaming summit

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Speech at the Gibraltar e-gaming summit


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20/04/12

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Speech at the Gibraltar e-gaming summit


Speech by the Minister with responsibility for Gambling, Gilbert Licudi QC to the KPMG Gibraltar egaming Summit held on 19 April 2012

It gives me great pleasure to open the second KPMG Gibraltar eGaming Summit.

Gibraltar is now in its 15th year of providing remote gambling, initially by telephone and since the year 2000 by internet.

As such, whilst gambling may be older than the Bible, remote gambling remains a very young and dynamic industry, built on an equally dynamic IT and communications industry.

A change in Government in December 2011 in Gibraltar has brought a Minister with specific responsibility for Gambling.

The Gibraltar Government is committed to continue working with the industry, supporting it in Europe and further afield, providing a strong and respected regulatory environment balanced with a globally competitive commercial platform.

We now stand at 22 licence holders with 37 licences between them.

There are a number of other applications which are currently being considered. We will continue to follow a cautious and selective approach to licensing.

We remain committed to licensing only the world’s best operators, sustaining a critical mass of like-minded companies, like-minded with the Government and like- minded with each other, committed to providing safe and secure remote gambling services within and beyond Europe.

We expect and require our licensees to be as precious about their reputation as we are about ours.

Gibraltar has set a high bar for entry into this market and will continue to do so.

We also recognise that there are both opportunities and challenges facing the industry.

It is always tempting to dwell on the challenges, as they often appear nearer and more threatening.

Of course, the issue that many in the industry have been talking about recently is the current UK proposal to introduce a point of consumption tax in December 2014 along with a licensing and regulatory regime for foreign operators.

This is a proposal which has disappointed us and which we take seriously.

It is a matter which the Gibraltar Government is giving priority.

We have already engaged and will continue to engage with the UK Government on this issue.

The very first meeting which the Chief Minister and I had on our first trip to London after the elections was precisely on this matter when we met with John Penrose, Minister at the Department of Culture, Media and Sport who are leading on the licensing aspect of the current proposal.

The following day we met Chloe Smith, Minister at the Treasury, to discuss the proposed tax and put Gibraltar’s view. Maria Brennan who is here today and who will be addressing you was present at that meeting.

I was glad to have the opportunity of speaking to Maria last night and to be able to put again the Gibraltar Government’s position which she will be taking back to London

We will continue to lobby and present our arguments to the UK Government.

This is a political proposal and politicians, much as we may protest otherwise, are not unknown to change their minds.

That seems to be happening already on another announcement made by the UK Chancellor at last month’s budget – the proposal to cap tax relief on donations to charity.David Cameron’s comments this week on this suggests that the UK Government is prepared to listen.

We will make sure that our position on the proposed gaming transaction tax is heard and taken into account.

We will make sure that they understand that what they call a fairer system of taxation would operate with disproportionate unfairness with regard to Gibraltar.

It has also been suggested to us that one of the reasons for the licensing and regulatory regime is the need to protect UK customers.

Online gambling is a leisure activity that carries some risks.

Some customers may exercise poor judgment and control,

Some customers may seek to commit crimes against the operators,

Some customers may seek to rip off others as well as the operators.

Gibraltar has shown that such risks are best managed where the providers are small in number, high in quality and tight in their regulation.

But we also know that remote gambling customers, the good and the bad, become increasingly astute. They will seek out the best odds, the best bonus, the best deals – and there are plenty of sites to advise and inform them where these can be found.

Some illegal markets have been built on such sites. That black market has been squeezed out of the UK by low cost but properly regulated regimes like Gibraltar’s.

The emerging UK model lays the ground for it to re- emerge as surely as it has elsewhere.

Perversely, a UK licensing and regulatory regime which is said to be necessary to protect UK customers may have precisely the opposite effect by driving those customers to unlicensed and unregulated operators based in less reputable jurisdictions who will have no intention of paying the proposed point of consumption tax in the UK.

This is not the first threat or challenge Gibraltar has faced.

It is worth recalling that one of the first threats we faced was in 2001 when the UK Gross Profit Tax was introduced.

In 2006 the Unlawful Internet Gambling Enforcement Act was introduced in the US. In 2009 and 2010 we had the Italian and French regimes, in 2011 we had Denmark – there have been others.

In each case Gibraltar has been able to meet those challenges with resilience and determination.

And in each case the industry moved on and grew.

In any new market threats and opportunities will ebb and flow.

It is important that the Gibraltar Government is perceptive and responsive to such events and is able to demonstrate sound judgment and the ability to act and adapt where necessary.

I have no doubt that the Government of which I am part will do precisely that. And we will do so by talking and listening to and in partnership with our operators.

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