Ever since Gibraltar became a tax have for online gambling businesses offering services to a UK facing audience, the economy has grown. They are a "White-Listed" territory which means that websites with the brand of the Gibraltar Commission of Gambling as their license holder, may offer services to the UK. Gibraltar is a British territory based at the tip of the Iberian Peninsula, where there is a long-standing political dispute about who owns it between Britain and Spain.
Now with a new gambling tax planned for British facing online casinos and other gambling brands, this territorial dispute has become an online gambling dispute, and it is a Briton vs. Briton difference of opinion. In Gibraltar officials and executives in this thriving industry are crying foul over the UK. Prime Minister David Cameron has a plan to impose a 15 % tax on British residents who place bets any of the dozens of web sites hosted and licensed in Gibraltar.
This small outpost of the once British Empire sees the proposed tax as a red flag area. Gibraltar has autonomy over trade and industry issues, as well as the ability to set and collect tax. In fact when Betfair moved to Gibraltar in 2011, they declared that they would save between £20 and £30 million annually on taxes, just by making the move.
The current Gambling Commissioner of Gibraltar – Phill Brear – says that the taxe envisaged to be imposed was "clearly against the common-sense logic of electronic commerce." Something like 60% of all British online wagers were made through websites hosted and remotely licensed in Gibraltar.
There is talk from the UK of "creating a level playing field", but e-commerce by its very nature is not the same type of trade as high-street shops. The 15% would be levied on websites that serve British Clients in the form of a secondary license and in comparison to the 1% levied by Gibraltar authorities, there a massive difference in mark-up to meet.
David Cameron wants the new tax written into law to be levied by December 2014, which would make it compulsory for Gibraltar- centred companies to hold a British license in order to serve British customers.
This effectively means that the same rules that govern British High Street Betting Shops, Casinos and so on, would govern the online sector of this industry in Gibraltar. This basically takes away any autonomy that Gibraltar has over their tax affairs. What we are wondering is – will the European Commission have anything to say over this, according with principles of fair trade.