Gibraltar opens Gambling Act draft for consultation, introducing licensee presence requirements and more flexible regulatory powers

Gibraltar is set to require local presence for licensees in its new Gambling Act, according to a draft published for consultation last week. The provision mandates operators to be able to prove a “sufficient substantive presence” in the territory. 

A Command Paper on the draft bill was issued by the Government of Gibraltar and a consultation period commenced on May 31. The period will be open until the end of August 2022, and Gibraltar’s Gambling Division will also be consulting with the Gibraltar Betting and Gaming Association.  It would mark the first big update in 17 years, replacing the Gambling Act 2005.

The new gambling law follows a series of objectives, which include the preservation of confidence in gambling markets; protection of consumers; promotion of responsible gambling; prevention of links between gambling and crime, among others. The Government is seen as seeking to bolster the credibility of its gambling space and introduce further control.

But what many have noticed are the changes to be introduced to licensing, given licensees will now have to demonstrate a “sufficient substantive presence” in the jurisdiction. It is the main modification to the licensure regime. Licensing and regulatory bodies are set to continue to operate separately, as they currently do.

Gibraltar’s Minister of Finance, Albert Isola, is set to act as the licensing authority in the jurisdiction. The wording of the rule is set to allow for flexibility in its enactment, which includes equipment location and other related matters in consideration for the "sufficient substantive presence."

These requirements include the nature, extent, purpose and usage of equipment in the jurisdiction, as well as the number and nature of jobs to be created and maintained. The amount of tax revenue paid is also listed among the factors determining a licensee’s presence in Gibraltar.

Additionally, the new bill lays out a number of threshold conditions to be met for licensing, which relate to business conduct, owners' suitability, responsible gambling, crime prevention and office location.

The new gambling act follows a report published in 2016, which reviewed Gibraltar’s licensing and regulatory regime. Following the already-launched consultation period, the bill will be introduced in Parliament.

"The current Gambling Act has been long-lasting, but the nature of the sector has changed and it needed to be modernized to ensure that Gibraltar remains one of the main gambling centers for companies increasingly operating in more jurisdictions,” said Minister for Digital and Financial Services Albert Isola.

The Act is set to introduce a “modern, innovative, and suitable” new regime for Gibraltar’s gaming sector, which greatly contributes to the jurisdiction’s economic stability, being home to a large number of operators that yearly provide millions of dollars in revenue.

While the bill will introduce more flexible regulatory powers, it also includes legal rights to appeal and attempts to modernize the industry. The law gives the Minister for Digital and Financial Services the authority to draw up regulations and also gives the right to the Commissioner for Gambling to issue codes. It also will create a new Gambling Appeals Tribunal.

“In due course, the Gambling Division will issue a licensing framework and fees document and codes of practice, including a social responsibility code, for consultation,” the Government of Gibraltar has stated.