Gibraltar publishes Command Paper for New Gambling Act and opens consultation

10/06/2022 Peter Isola, Steven Caetano, Christian Caetano, Julian Warwick, Giovanni Origo

Gaming Act Gibraltar

The much-awaited update on the Gibraltar gambling legislation, further delayed by Brexit and the pandemic, has recently been published by Her Majesty’s Government of Gibraltar (“HMGOG”). The Command Paper is for a Bill to repeal and replace the existing Gambling Act 2005 to formalise and codify some of the established practices that have been implemented over recent years. The proposal comes to officially recognise these changes as the industry continues to evolve and mature.

A public consultation on the Command Paper, which includes the Proposed Gambling Bill, has started and it is expected to run until the end of August this year, enabling industry stakeholders including operators and game suppliers to provide their material thoughts and contributions to the new Act.

The purpose of the draft is to update the current legislative framework that regulates the gambling industry, bringing Gibraltar to a new modernised era of gaming supervision, licensing and control, applying a common-sense approach bringing in greater flexibility taking on board advancements in technology, and increasing the options and types of licenses available to operators involved in gaming in Gibraltar in one way or other.

The proposed Act introduces enhanced regulatory objectives for the regulation of gambling in Gibraltar, covering consumer protection – particularly of those considered to be vulnerable, safeguarding of trust in gambling markets, promotion of responsible and safer gambling, prevention of connections between gambling and crime, and the protection of the public interest and the reputation of the jurisdiction.

Changes in licensing arrangements

The proposed new Act takes a similar form to the Gibraltar Financial Services Act 2019, and it fortifies the then recommendations produced by HMGOG in its March 2016 review of the territory’s online gambling industry, including all-encompassing regulatory, licensing and legislative regimes.

While licensing and regulatory bodies will continue to operate separately, the new Bill introduces a requirement for licensees to have “sufficient substantive presence” in Gibraltar. As part of this requirement, the Government will consider the “nature, extent, purpose and usage” of equipment in Gibraltar, the “number and nature of jobs to be created and maintained” as well as the amount of tax revenue paid. This codifies the licensing and regulatory practice followed for many years in Gibraltar.

From a B2B and B2C perspective, the betting and gaming licensing requirements remain largely the same, however, there will be a third category covering support services to the Gaming industry such as marketing, AML and other aspects considered licensable by HMGOG today. This will enable not just core gambling services from Gibraltar to be regulated by a gambling licence, but also peripheral activities which has a Gibraltar touchpoint, even if the gaming activity is undertaken outside of the jurisdiction.

Professional change in controls: levelling up of the playing field

The new Act is also expected to bring a number of further changes, which include the introduction of a formalised ‘Regulated Persons’ regime, so individuals holding key/senior positions in specific gambling-related functions are approved by the Regulator to conduct roles demanding a greater level of commitment and responsibility. Additionally, a regulatory framework on thresholds and percentage control changes in owners/ shareholders’ in licenced gambling operators will be given formal statutory footing under the new Act, providing a high degree of certainty and robustness in the ownership structures of Gibraltar licence holders. A Right of Appeal to the forthcoming Gambling Appeals Tribunal will also be introduced to balance enhanced supervisory and enforcement powers of the Regulator to enable the assessment of decisions affecting applicants, regulated persons, and licence holders.

The new Bill, which is expected to come into force towards the end of this year or the beginning of 2023, comes to strengthen Gibraltar’s world-renowned status as a leading gaming hub into the next era of gaming regulation and supervision.

The reforms to be brought about by the Bill should in our view benefit regulators, consumers, operators, stakeholders, and the jurisdiction at large and build on Gibraltar’s measured and successful approach to date.

We will continue to publish our thoughts on each part of the Bill in the coming weeks/months as the consultation process continues in order to provide a more in-depth commentary and reaction to the above.