As part of a series of planned reforms for the point-of-supply market, and following its earlier proposal for a new Gambling Act, the British Overseas Territory; Gibraltar is set to implement a new, tiered system for its gambling licence fees.
The new planned tier system, will mean that major operators will pay more fees while smaller ones and start- ups will pay less
Before the planned change, operators of remote betting, remote gaming, other remote products, land-based gaming and retail betting each had to pay a £100,000 annual licence fee; while B2B suppliers, were required to pay an £85,000 yearly licence fee.
The Gibralta government in its launched consultation, has opted for a new, tiered system for remote betting and gaming licences, based on annual gross gambling yield (GGY), because licensing fees for startup and small operators whose business are in the building stage, can be a lopsided cost. It will no longer be, one license fits all system.
Operators will now need to apply for a separate licence, for each major gambling vertical they operate in; which means that an operator’s revenue from sports betting, does not impact the tier they are in for a gaming licence.
Betting and gaming operators, with an annual GGY of more than £300m within that particular vertical, must pay a £200,000 licence fee. For those bringing in GGY between £20 to £300m, the fee is £100,000, and for operators with a GGY of up to £20m, the fee is £50,000.
Another change to the licence structure following the consultation, is the introduction of a betting intermediary licence, for exchanges and similar businesses. This structure will carry a £100,000 licence fee, regardless of the size of business.
Lotteries will also have its own licence, which will be £100,000, regardless of size of business.
Different Types of Licensing to be Introduced
Affiliate licence
A new type of licence for marketing service providers, including affiliates. This licence will carry a £50,000 annual fee.
However, it will only apply to businesses that conduct marketing services, in or from Gibraltar.
B2B licence
Under the new B2B licence structure, instead of a single supplier licence, aggregators and software suppliers will have different types of licence.
Aggregators within one vertical – such as betting, RNG Gaming, lottery or live casino – will pay £85,000 annually, plus 1% of the revenue made from Gibraltar licence holders’ operations.
This change is intended to capture additional fee income, directly from the revenue of the content providers. The assumption then, will be that aggregators will pass this structure, on to their hosted content providers, through their charging mechanism.
If the aggregators offer more than one gambling vertical, they will have to pay an additional £15,000.
Under this license, a software supplier, which includes a betting or gaming platform provider, (but not B2C businesses, that use an in-house platform) will also have access to three tiers of licence.
The government however, stated that it is welcome to discussions with aggregators, on the impact of the proposed business model.
Tier-three Licence
A tier-three licence, would allow access to platforms with less than £200,000 in sales, from Gibraltar licensees or to platforms, with no more than two approved integrations with Gibraltar-licensed B2Cs. The licence would cost £20,000 per year.
Tier-two Licence
A tier-two licence, allows sales of up to £550,000 or no more than three approved integrations. This would cost an annual fee of £50,000
If a platform provider is above the approved thresholds, it must apply for a tier-one licence, which carries an annual fee of £85,000.
Betting data providers and suppliers of other B2B services, such as compliance or anti-fraud products, will each have their own licences, with a £50,000 annual fee, regardless of the size of business.
Other Licences
Regardless of where the ownership structure of any Gibraltar-linked holding entity features; whether based in Gibraltar or doing business elsewhere; they are also subject to a £50,000 licence fee.
Entities that hold or manage customer funds, but are not otherwise covered by one of the other types of licence are also subject to a £50,000 licence fee.
Point-of-supply reforms
The new Gambling Act proposed in June by the Gibraltar government, was mostly focused on establishing a local presence for Gibraltar licensees, including a requirement that licensees, should have a sufficient substantive presence in Gibraltar.
