According to a new report of the European Parliament, UK’s exit from the EU would have a massive impact on Gibraltar’s economy, with the latter risking to lose approximately 20% of its service. The study showed that unfortunately for Gibraltar, there is absolutely no guarantee that some kind of a balance will be found between the priorities of Gibraltar and the effects of the BREXIT.
Inevitably, Britain’s exit from the European Union would have a negative impact on the territory’s gambling market, too. As revealed by the report, the already existing framework is dependent on the regulations of the EU, so the situation of Gibraltar would have to be subjected to negotiations in case that Britain leaves the Single Market of the EU.
As mentioned above, Gibraltar could lose as much as 20% of its service trade, but it seems that according to the recent European Parliament’s report the territory’s potential loss of trade is “less important” than the overall UK market.
Currently, Gibraltar is home to many international gambling companies that have chosen it due to the favourable legislation framework, including lower taxes and unimpeded access to the Single Market of the EU. At present times, gambling is among the most successful markets for Gibraltar, and is undoubtedly one of the most important industries there, especially considering the fact that it accounts for approximately 25% of the local economy. The gambling market in Gibraltar also generates about 40% of corporate tax revenues and holds about 8% to 9% of its jobs.
On the other hand, the European Union’s Single Market is expected to expand over the years to come. According to a recent report, it could be valued to approximately €30 billion on a yearly basis by 2021, which basically means it could almost double its current size. Unfortunately for Gibraltar, the Britain’s exit from the EU would inevitably hit hard its economy, including the gambling market, and could see it close for the rest of the European Union. As a matter of fact, the first effects of the looming BREXIT are already visible, with Malta and other low-tax jurisdictions becoming more and more appealing to operators.
The good news is that still, there are no indications that any gambling companies intend to leave Gibraltar yet. At the time she called for early general election, the UK Prime Minister Theresa May has revealed that the entire BREXIT process is estimated to about two years. Still, some large gambling operators, including 888 Holdings, have already warned about potential dangers that BREXIT could have on Gibraltar’s gambling industry.
On the other hand, Malta and other low-tax destinations are perfectly ready to meet the eventually increasing interest of Gibraltar-based gambling companies. The online gambling industry of the country is among the largest ones in a global scale, with 11% of the Gross Domestic Product (GDP) being represented by the sector and about 8,000 people being employed in it.
- Author
Daniel Williams
