Gibraltar’s eGaming operators are not being browbeaten by Brexit says Jon Tricker, Managing Director KPMG Gibraltar, as he assesses the outlook for the Gibraltar eGaming industry
It’s difficult for any outlook on Gibraltar’s future not to be dominated by reference to Brexit but it’s also surprising how, in just a few months, talk has already turned from initial fears and concerns to a positive and united sense of purpose on how the jurisdiction can seize opportunities to enhance and expand its proposition in the face of a rapidly changing landscape.
There was certainly no indication that Gibraltar’s eGaming sector is going to lie down and blithely accept a fate it has had no hand in creating at the recent KPMG Gibraltar eGaming summit.
As moderator of a panel discussion with three senior Gibraltar gaming lawyers - Peter Howitt from Ramparts, Peter Montegriffo from Hassans and Peter Isola from Isolas – it was clear to me that not only are operators in the sector on the front foot, but the jurisdiction is coming together to visualise its own post-Brexit future.
This pro-active stance has been driven in part by a resurgence in business – ironically Gibraltar has been busier than ever since the referendum last June, not just in eGaming but across the board including in financial services. Whilst, as Peter Montegriffo said, it has “defied our own perception of how we thought a vote of this type might play out in Gibraltar”, all three experts point to strong relationships between government regulators and business as well as the political stability and support of key industries as a factor in Gibraltar’s continued attractiveness.
“Gibraltar has got an ability to keep looking outwards and encouraging innovation in sectors which aren’t mainstream, where you do need the Government and the regulator and the industry to pull together,” explained Peter Howitt.
Engagement between the Gibraltar Government and its UK counterpart on forthcoming Brexit negotiations was reported to be “unparalleled” with Peter Montegriffo identifying Gibraltar’s three main priorities as a free-flowing frontier, access to the EU market (although this less relevant in the eGaming industry) and an enhanced relationship with the UK.
While the summit took place before news of a possible Spanish veto on a post Brexit agreement applying automatically to Gibraltar, future relations with its northerly neighbour were clearly a major concern for all attendees given that up to 10,000 people cross from Spain every day to work in the territory. A poll of delegates during the session also identified this as being the most important factor for Gibraltar operators at the current time.
Peter Isola suggested that any restrictions imposed on the border would damage Spain’s economy as much as Gibraltar and therefore fears may be overblown. In relation to the position of EU workers post Brexit, Peter Montegriffo pointed to Gibraltar’s historic embrace of external expertise. “We wouldn’t have grown the eGaming industry here, even less a fiduciary sector, if we hadn’t welcomed external expertise,” he said. But while he felt that “accommodating attitude would prevail”, it was important to identify sectors which would “leverage the existing expertise” to create new opportunities.
Brexit aside, the Gibraltar Government has announced a review of the Gaming Act and there was recognition on the panel that in today’s increasingly regulated world, it is essential to keep governance frameworks appropriate, up to date and in a position to support a more diversified industry that embraces elements such as blockchain.
Peter Montegriffo: “In my view the main reason Gibraltar became attractive in the late 1990s and early 2000s was because the Government was committed to putting in place a regulatory system that would embrace this industry. If we’re able to do that in the fledgling industries, it should allow us to repeat the success we enjoyed 15 or so years ago.”
Referring to the legal challenge from Gibraltar to the UK’s point of consumption tax, the panel agreed that the case looked different over the passage of time. The Attorney General’s opinion that Gibraltar is the same member state as the UK offers positives for ensuring there is no distinction between the UK and Gibraltar in a post-Brexit world, said Peter Montegriffo, and there had been an unforeseen and welcome increase in traffic to Gibraltar following the introduction of the tax as businesses chose to be regulated there on their global footprint rather than in the UK.
It all goes to prove that the relationship between Gibraltar, the UK and the EU is an extremely complicated and nuanced one, something that was recognised in recent discussions with the junior Brexit minister Robin Walker, which were described by those who attended as “very positive”.
The last word went to Peter Howitt who said with the ongoing uncertainty around Brexit, it was important that both Gibraltar and the UK had enough resources politically and in the civil service to keep some focus on things that are outside of that process “so the political capital and the human capital is also put into things where it is not in the gift of the negotiations with Europe” he said. “The quicker that is done and communicated to the business sectors in Gibraltar and the UK, the better.”
© 2017 KPMG Limited, a Gibraltar Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.