When the British people voted in the 2016 referendum to leave the EU, a substantial period of turbulence for industries in the financial and gambling sector began for those based in Gibraltar. With the UK readying to leave the EU, would these services still be able to access the market? It now seems as though these regulations are here to stay.
The UK government announced last week that it would guarantee Gibraltar’s access to financial services and online gaming while Brexit is ongoing – a huge reassurance for those who live and work in the British Overseas Territory.
Currently, the UK market accounts for over 90% of all business conducted by Gibraltar-based companies under EU single market rules. Under these measures, the UK will guarantee Gibraltar financial services firms’ access to home markets, as they do now until 2020.
Why is this important? Well, the new guarantees will reassure Gibraltar-based companies that despite whatever is agreed with the EU over Brexit, their access to this crucial market will remain. Gibraltar was the first country to open its doors to the iGaming industry and currently represents around 35 licensed operators – including William Hill and Gala Coral.
Now, these gambling operators and more will continue to access the UK market after Brexit in the same way they do now, with both governments working towards an agreement to enable closer collaboration between gambling regulators in both Gibraltar and the UK.
“Great care has rightly been taken by the UK and Gibraltar to ensure regulatory standards will be maintained between us in a manner that will be designed to assure customer protection and equivalence on regulatory outcomes going forward,” Chief Minister Fabian Picardo told the Gibralter Chronicle.
“Today our bilateral relationship grows stronger, and the terms for it to endure are further cemented as we realize the commitment to maintain and enhance market access for Gibraltar service providers into the UK post-Brexit.”
Picardo added: “The work we have done with the teams led by Secretary of State David Davis at DeExEU and Foreign Secretary Boris Johnson at the FCO is bearing fruit today.
“The UK – and in particular Mr Davis and Mr Johnson – has recognized the importance of market access for Gibraltar. I extend the gratitude of Her Majesty’s Government of Gibraltar and the people of Gibraltar to all involved.”
“Strong, historic and valued” relationship
The announcement was made in London after a meeting of the Joint Ministerial Council chaired by the Minister of State at the Department for Exiting the European Union, Robin Walker, and attended by the Minister for Europe, Sir Alan Duncan and Economic Secretary to the Treasury John Glen.
According to the government, they say that the measures secured “the strong, historic and valued UK-Gibraltar relationship”, both for now and beyond Brexit.
Walker said: “We have agreed a positive package deal on issues surrounding our exit from the EU, once again demonstrating that we stand shoulder to shoulder with Gibraltarians in our unwavering commitment to the UK-Gibraltar relationship.”
Economic Secretary John Glen also acknowledged the importance to Gibraltar-based companies of the announcement on continued barrier-free access to the UK.
He said: “We know the people and businesses of Gibraltar have been asking for certainty, and we have heard them. We are ensuring that Gibraltar’s access to UK markets will continue unchanged until 2020, even in the unlikely event of no deal being reached.
“This will give us the time we need to work with the government of Gibraltar to design a new, modernized agreement, based on similar, high standards of regulation and enforcement.”
The main benefit of this agreement will be to add confidence to the Gibraltar market, which is currently home to over 30 iGaming operators who flock to the destination thanks to its lower corporate taxes and full European Union membership. At the moment iGaming is the largest local sector, with 5000 people employed.
And recently Brexit hasn’t been the only concern. With Gibraltar’s economy somewhat dependent on the UK, especially gambling, the review on fixed-odds betting terminals (FOBTs) has raised some negative concerns.
As UK authorities decide whether or not to reduce the existing £100 maximum stake allowed at the machines to £2, Gibraltar waits to see if they face any further issues in regards to the British gambling industry.
The agreement, months in the making, has been created to encourage growth in crucial sectors of the economy.
The challenge now beings to design a replacement framework that will endure beyond 2020, looking at regulation and enforcement in an age of information-sharing and transparency.