The online gaming industry is a key part of Gibraltar’s economy and due to its unique position within Europe it has been renowned as one of the main iGaming hubs in the world, but recently several factors have threatened that position. Insight talks to Paul Foster, CEO of The Gibraltar Betting and Gaming Association (GBGA).
The GBGA has operated since January 2005, and in April 2013 it was incorporated as a trade association representing licensed gaming operators in Gibraltar. “As the number of licences increased from the original three or four upwards, the Government decided that they wanted to work with a group of gaming companies rather than individually with each company, so we formed the GBGA,” Paul Foster explains. Currently there are 28 members split between B2B and B2C brands.
COVID-19 was one of those factors that had a huge impact on the iGaming industry in Gibraltar, and Paul says that like everyone else the issue at the start of the pandemic was how to get staff either into the office or working from home. “One of the benefits is that we are a truly international industry, versed in using online chat, Team, Zoom, Microsoft Teams etc., so for the gaming companies it was just a matter of making sure that individuals had the technology to be able to work from home.” This meant buying laptops for employees who didn’t have access to one, but that came with its own logistical problems. “Thankfully, everybody has smart phones so they could carry on working, albeit inefficiently until we were able to supply the laptops.
Paul goes on to state that the second impact was on their operators who had land based businesses which immediately meant that they faced cash flow and operational challenges. “That is where it hit the gaming industry.”
BREXIT has cast a long shadow over the future of the gaming industry in Gibraltar for quite some time. “There were two issues here,” Paul says. “One was the ability to provide services into the EU and the industry became aware that no matter what happened, unless there was a fantastic deal, there was a real risk that we wouldn’t be able to provide gaming services from Gibraltar into the EU.” What transpired was that the gambling companies very quickly reacted and set up EU entities so that they could provide services from elsewhere like Malta, setting up satellite offices for the European element of the business. Gibraltar basically just provides head office services for some companies but they also provide services into the UK and non-EU countries such as the US, Latin America, Africa and Asia.”
Asked what major benefits, particularly with the industry in mind, will being a part of the Schengen Area bring, Paul says that one of the risks was the prospect of reduced border fluidity. “Prior to Covid-19 a lot of planning involvedbusiness continuity and setting up secondary offices across the border, but one of the impacts of the pandemic was that people started working from home, so when it came to BREXIT and the border situation most of our members were more relaxed as a result of it .”The concern was that when restrictions were lifted, would employees be able to come back over the border to work and if there was a problem at the border everyday this could lead to a brain drain in Gibraltar.
“We were very happy when we found out that the Government had negotiated the “in principle”agreement because we need freedom of movement across the border for our highly skilled workers and remember a lot of these skilled workers are European – they are not ex-pat Brits, they are from Scandinavia, the Netherlands, Germany, France, Spain and Portugal, so the kind of deal that has been done is excellent.”
Paul confirms that the GBGA has been working closely with the Gibraltar Government in all aspects. “MHGOGhas been very supportive of the industry and we have worked closely together on the CELAC committee for Covid, we have had monthly meetings with them on Brexit, and now we are working with them on the solution for the Border Agreement, so we are very happy with our relationship with the Government and they are very supportive and very open with us.”Paul confirmed that the gaming industry chose not to take advantage of the Business & Employee Business Terms (BEAT) Covid-19 support packages in the belief that support should go to the people who have the greatest needs.
“At the original CELAC meeting the gaming companies immediately said they would not take any money even if they were suffering because of retail, but we are mostly online, so we asked GoG to exclude us from the BEAT payments and from furloughing.” He added that they also offered the Government and the GHA access to facilities such as parking spaces, the use of apartments for nurses and the use of call centres on a temporary basis.
“Gibraltar is still seen as a very good gaming hub,” Paul states. “The Government of Gibraltar are very supportive of the sector and in terms of the external parameters, Gibraltar is still the place to be and a lot of people still want to be licensed here.” He goes on to add that there is a real nucleus of gaming, IT and marketing professionals in Gibraltar which means that the industry always has access to new employees if needed. “The key industry players have been here a long time and they are not planning to leave unless something major changes.”
“The future for the gaming industry in Gibraltar is bright because we are still the innovation hub of the world in online gaming, but we will always caveat that and say the “in principle” agreement needs to be finalised and subject to that it will reduce any potential impact on the gaming sector.”
The Gambling Regulator is quite open that there are a lot of companies still applying for gaming licences in Gibraltar. “Firstly, it is a great place to live especially if you are able to live in Spain and commute across to Gibraltar,” Paul says. “Secondly, other companies want to come to piggyback on the experience and knowledge that is in Gibraltar and there is always a list of people applying for licences here, and at the GBGA we are always happy to talk to new companies and explain the process.”
Paul is optimistic for the future of the industry in Gibraltar. “The gaming industry has been here for over 22 years and it is very committed to Gibraltar and the Government of Gibraltar is committed to us and we have a great symbiotic relationship, so the GBGA is very positive on behalf of our members and although there will always be companies coming and going, mergers and acquisitions – overall the innovative and prominent gaming hub of Gibraltar will grow and thrive.”