E-Gaming Gibraltar

Remote gambling

All gambling operations in Gibraltar are required to be licensed under the Gambling Act 2005. Remote Gambling licences, including for telephone and internet betting, are issued by the Licensing Authority. The Gibraltar Gambling Commissioner is empowered to ensure that licensees conduct their operations in accordance with their licenses and maintain the good reputation of Gibraltar.

The Licensing Authority has traditionally only considered licensing blue chip companies with a proven track record in gambling in other jurisdictions. Nevertheless, Gibraltar will also consider the licensing of appropriately funded start-ups and expanding operations proposing to relocate wholly or partly from other jurisdictions.

Applicants, who might include those wishing to enter emerging non-EU markets, are expected to have a clear business plan where the source of legitimate funding can be clearly identified.

Gaming companies will also be expected to establish proportionate substance in Gibraltar and make an economic contribution to the jurisdiction. The Licensing Authority understands the challenges around the need for multi-jurisdictional technology frameworks, including the use of cloud services and is prepared to work constructively on this issue with applicants.

Gibraltar is a business friendly but well regulated jurisdiction, with political stability and a strong commitment to transparency and the rule of law. The jurisdiction remains a hub for both UK and international facing operators with a pool of remote gambling talent.

Licensing principles

The key principle in considering the licensing of operators is keeping crime out of gambling. Potential licensees must meet exacting fitness and propriety standards, have no criminal history or connections, and are required to meet international anti-money laundering standards.

Applicants must therefore submit themselves to regulatory due diligence that focuses on establishing ultimate beneficial ownership and control of the business. This will include transparency around trusts and other structures. The Licensing Authority will need to understand the corporate structure of the group of which the applicant is part.

The executive management will also need to demonstrate competence through a cogent business plan and proposals for effective governance, policies and procedures – including consumer protection and social responsibility.

Key individuals will be required to supply certificates of good conduct from jurisdictions in which they have worked or resided, or in which they retain nationality. Previous regulatory history will also be taken into account. The Licensing Authority will reject applicants if they fall short of the fitness and propriety threshold.

Outlining the economic benefits that applicants hope to bring to the jurisdiction including employment, rental of office space, use of Gibraltar technical infrastructure providers and future tax yield is all relevant information that will assist the applicant.

Licensing procedures

Before a formal licence application form and subsidiary documentation is issued, potential applicants are expected to engage with the Gibraltar Gambling Division and the Gambling Commissioner, who acts as adviser to the Licensing Authority.

The pre-licensing stage is an early assessment of the suitability and competence of the operator, its controllers and proposed management. It is designed to assist applicants in constructing a quality application that will be thoroughly and fairly assessed.

If an applicant passes this threshold, then an ‘in principle’ decision to licence will be made or the applicant will be informed told that any application is unlikely to succeed. No licence will be issued or a ‘go-live’ date agreed until the full due diligence process is completed and a thorough evaluation of the business plan has been finalised.

Timescales for licensing are variable, but a high quality application that comprehensively covers issues relating to ownership, control, governance, management, a clear and credible business plan and policies in respect of anti-money laundering, data protection, consumer protection and responsible gambling can be processed within a relatively short period of time.

The provision of incomplete, false or misleading information or a reluctance to respond to reasonable requests is likely to damage an application.

Testing Requirements

Remote gambling licensees must ensure that their gambling products and services have been tested and certified as compliant with Gibraltar’s regulatory model and standards. The Gibraltar Licensing Authority has approved certain independent test houses to carry out this function.

Effective Control

A licensee must at all times be effectively controlled and managed from Gibraltar. Upon request by the Licensing Authority, a licensee is obliged to produce lists of key personnel, including shareholders, directors and executive managers involved in the management and operation of the licensee’s business in Gibraltar.

Control of the licensee’s entire business must be exercised in Gibraltar to ensure that the bank accounts into which any customer’s funds, stakes, wagers, prizes or other monies are received, held or paid out from are controlled by the licensee. The operation of any credit card merchant account used in the course of the business must also be fully and effectively controlled by the licensee.

No bank account or credit card merchant account, nor the receipt, processing, holding and clearance of customer funds and credit card transactions, should be maintained by a licensee in a jurisdiction other than Gibraltar, or in a Gibraltar licensed institution without the prior approval of the Licensing Authority.

Accounts and Audit

A licensee will be be required to produce audited accounts to the Licensing Authority each year during the licence period and maintain its financial records in accordance with the applicable law. A licensee will also be required to meet all its accounts and filing requirements as set out in the Companies Act and any other applicable legislation.

Codes of Practice

The Gambling Commissioner is responsible for drawing up and issuing codes of practice for licensed operators to ensure they conduct their undertakings in accordance with the provisions of the Gambling Act 2005. A licensee is required to agree to be bound by any code of practice issued by the Gambling Commissioner from time to time.

Anti-money Laundering code for non-UK international customers

The Gambling Division has set out anti-money laundering risk assessment processes and controls for B2C licensees in respect of non-UK international customers, which are applicable to all customers, regardless of jurisdiction. These include:

Operators need to ensure that proportionate enhanced due diligence is conducted on high depositing customers; irrespective of whether or not their losses are high.
Operators need to have systems in place to identify sudden and significant increases in the velocity of transactions and for these incidents to be escalated to management for consideration.
Operators need to have systems and controls in place to ensure adequate ongoing monitoring of customer accounts.
Operators need to have integrated systems and communication channels between different functions (e.g. compliance, fraud and risk, customer services and VIP managers) to ensure all customer interactions can be considered in the round and not in isolation.
Operators need to ensure that all staff are trained to a level commensurate with their role and that all customer facing staff understand both their AML and social responsibility obligations.
Operators must properly risk assess all the ways in which customers fund their accounts for all channels (including peer to peer gambling) and carry out appropriate due diligence checks on all participants.
Operators must report suspicious activity in a timely manner in line with their obligations under the Gibraltar Proceeds of Crime Act 2015 (POCA).

Executive teams under the supervision of their Boards must ensure that internal risk assessments and reviews in this area take full account of the Gambling Commissioner’s expectations in this important area.

Advertising Guidelines

A licensee must ensure that all advertising, promotion and sponsoring activity, of whatever type and through whatever medium, with regard to gambling activities is truthful, accurate and targeted exclusively at adult players.

Licensees must ensure that any Internet websites used to advertise, promote or operate their gambling activities must not include links to other sites with violent or immoral content or that may be designed for access by minors.

Gibraltar gaming licences are issued on the basis that the advertising and promotion of gambling activities can only be directed to citizens of nations in which it is not illegal for such activities to be undertaken and that the licensee will not provide gambling activities to any person where the provision of such services by the licensee would be illegal under the applicable law.

Payout of prize monies

The licensee must at all times have adequate financing available to pay all current and reasonably estimated prospective obligations in respect of prize payouts and to ensure there is adequate working capital to finance ongoing operations. Winnings and account balances must be paid out to registered players in accordance with clearly established arrangements agreed to with the customer.

Customer privacy and data protection

Licensees are required by the Licensing Authority to obtain at least the following basic personal information with regard to all prospective customers: full name, residential address, and date of birth.

After obtaining the required information and completing any due diligence, the licensee will be entitled to deal with the customer as a registered player.

Gaming duty

Under the Gambling (Duties and Licensing Fees) Regulations 2018, a General Betting Duty of 0.15% is levied on the first £100,000 of gross betting profit on bet receipts in each year for gambling businesses. Betting Intermediary Duty is also levied at 0.15% on the first £100,000 gross profit on betting event revenues in each year for gambling operators.

Sovereign's Gaming Services

Since the adoption of online gambling legislation by a handful of jurisdictions in the 1990’s the Sovereign Group has been at the forefront of providing corporate assistance to b2b operators, b2c turnkey providers, developers and affiliates.

The sector has experienced rapid growth amidst a constantly changing regulatory environment and the requirement for sound advisory services and guidance on issues ranging from corporate structuring to licensing remains as relevant as ever.

Being located in the key E-Gaming jurisdictions of Gibraltar, Malta and the Isle of Man allows Sovereign to consider each regime’s credentials and provides our clients with an unbiased opinion on which is best suited to meet their needs.

Our services include:

Advisory

Exploring the suitability of various e-gaming jurisdictions in attaining a remote gambling licence.
White label solutions.

Implementation

Company formation and structuring.
Licensing applications..
Bank account opening and payment solutions.
Intellectual property and royalty structuring.
Web hosting and co-location.
Website terms and technology contracts.
Data protection audits.
VAT solutions.
Tax planning for related personnel including managers, employees and affiliates.

Additional Services offered through our internal divisions: Sovereign Insurance Services, Sovereign Accounting Servicesand Sovereign Pensions Services.

Contingency insurance (insuring against the outcome of an event and independent outcome i.e. lottery, Bingo, etc).
Book-keeping, accounting and external auditing services.
Occupational Pensions Schemes.