Gibraltar

Gibraltar is a self-governing Overseas Territory. Until Brexit, it formed part of the EU via the UK; since the UK’s withdrawal, Gibraltar is treated as a third country, but it retains its own direct-tax regime separate from the U.K’s. Gibraltar has become known as an online gambling center. Today, dozens of major European betting and gaming brands still hold Gibraltar remote licenses; gambling is estimated to contribute close to a third of Gibraltar’s GDP and around one-third of government tax receipts. Many online gaming operators view Gibraltar as the best place to locate their operations.

Gibraltar began offering licenses to online gaming sites in 1998. The Licensing Authority grants the following types of gaming licenses: bookmaker's license, betting intermediary's license, gaming operator's license, gaming machine license, lottery promoter's license, pools promoter's license and remote gambling license. Licenses are only granted to operators with a proven track record who are licensed in a reputable jurisdiction and have good financial standing and a realistic business plan. Software testing is part of the process as well.

Online gaming tax is levied at a rate of 1% of relevant income, i.e., gaming yield for online casinos and bets placed for online bookmakers, capped at GBP 425,000 with a minimum payable of GBP 85,000. Betting exchanges are currently taxed on the same basis as fixed-odds operations. For internet casinos, the gaming tax is currently levied at 1% of the gaming yield or gross profit. The maximum and minimum cap is the same as for fixed-odds betting.

There is no VAT (Value Added Tax) in Gibraltar.

In June 2014, the Gibraltar Betting and Gaming Association (GBGA), which represents operators based in Gibraltar, challenged the Gambling (Licensing and Advertising) Act 2014, which required operators to apply for a license from the U.K. Gambling Commission. The GBGA's argument was that, because Gibraltar-based operators are already licensed in Gibraltar, they do not need a license in the U.K. and should not be subject to the U.K.'s 15% point of consumption tax. In July 2015, the challenge was referred by the High Court in England to the Court of Justice of the European Union. The Court ultimately treated the UK and Gibraltar as a single Member State for EU-law purposes, and the challenge failed; Gibraltar-licensed operators must now hold U.K. licenses and pay U.K. remote gambling duties on British play, so GBGA’s focus has shifted toward broader lobbying on U.K. and EU reforms rather than opposing the tax itself.