Brexit pushes betting giant 888 to proceed with Malta back-up plan

The UK betting giant 888 has declared it will apply for a gaming licence in Malta as the date for Britain’s exit from the European Union approaches.

888, which is based in Gibraltar, was already considering the possibility that it might have to move its headquarters from ‘the Rock’ to Malta back in 2017.

Now, in its preliminary results report for 2018, the company said its Malta plan had been set in motion.

“The status of Gibraltar as a result of Brexit remains unclear. Recent indications by the European Union have suggested that Spain would be granted a veto right with respect to the application to Gibraltar of transitional arrangements agreed with the United Kingdom, which increases the risk of a ‘hard Brexit’ for Gibraltar.

“If 888 were to remain registered, licenced and operating in Gibraltar in these circumstances, its ability to rely on EU freedom of services and establishment principles in supplying its services within the EU will be limited.”

888 said that by staying out of the EU, it may become ineligible to continue to hold regulatory licences in certain EU jurisdictions.

“888 is not able to control political changes of this nature, however it is proceeding with its back-up plan of obtaining a gaming licence in Malta and establishing a server farm in Ireland so that it can continue to serve European markets with no disruption to its business.”

The UK formally notified the EU of its intention to withdraw in March 2017, which commenced a negotiation period which will be concluded in March 2019 with the United Kingdom ceasing to be a member of the EU.

The ability to rely on EU principles underpins the regulatory strategy of many gaming firms, which is why Malta is considered an alternative ‘dot com’ licensing jurisdiction for ‘Brexodus’ firms.

Gibraltar is home to many of the world’s leading e-gaming and sports betting firms like BetVictor, Bet365, Yggdrasil, NetEnt, and Lottoland, and is seen as a worldwide hub for the industry.

Gibraltarians voted emphatically to remain in the EU, by more than 94%, and are naturally anxious about the impact of Brexit on their economy. The territory’s online gambling industry is its biggest employer, and accounts for 25% of its GDP.

But the country is tiny and most of its workforce lives across the border in Spain, which constrains the territory’s ability to compete as an online gambling jurisdiction. So its future relies on Spain’s willingness to allow cross-border movement.

While Gibraltar grapples with its own Brexit risk, Maltese MPs are now debating a piece of legislation that will combine all existing gambling rules into one single law. The Gaming Act is expected to reduce red tape that keeps gambling companies away from Malta, and instead of several tiers of licences, operators will be regulated via a business-to-consumer licence and business-to-business licence. The latter will be exempted from gaming taxes, making it more lucrative for gambling entities.