The 33 online gaming companies operating out of Gibraltar will now have to compete on a level playing field with their fellows in Malta, the Isle of Man and Alderney, following a judgment by the European Court of Justice.
The special one per cent tax paid by the Gibraltar-based companies will now be replaced by the UK’s point-of-consumption tax rate, which was raised to 15 per cent in July, 2014, for revenues raised through UK-based players, which comprise an estimated 80 per cent of the customers for the Gibraltarian companies.
The judgment concluded that Gibraltar and the UK should be treated legally as a single member state. The decision was a preliminary ruling on a dispute between the UK government and the Gibraltar Betting and Gaming Association on whether Gibraltar and the UK should be considered separate jurisdictions under EU rules on the free movement of goods and services between member states.
The European Court, in rejecting the Gibraltar authority’s case, said that while Gibraltar was technically not part of the UK, the court regarded a dispute between Gibraltar and the UK as “a situation confined in all respects within a single member state.”
