Gibraltar to split licensing fees for B2C and B2B businesses

The Government of Gibraltar has sanctioned a consultation to review the licence fees of remote gambling businesses and services offered. 

The consultation will be attached to the government’s proposed Bill, which aims to update the Gibraltar Gambling Act and deals “specifically with proposed application fees and annual licensing fees imposed on remote gambling services”.

Headline directives see the Bill propose a “new framework for licensing and the regulation of the commercial gambling industry in Gibraltar and other elements of gambling activities”.

The consultation sees the Gibraltar government outline its preference for a ‘new tiered framework’ to license and classify remote gambling businesses.

The new framework will bring a close to Gibraltar’s uniformed £100,000 (B2C) and £85,000 (B2B) annual licence fees applied on remote gambling verticals and services.

For new B2C operators, licence fee applications will cost £30,000. For B2B suppliers’ licence fee applications costs will stand at £20,000 for content aggregators and £10,000 for ‘Direct Software Services’.

Gibraltar’s revamped B2C licensing framework will incorporate a three-tier GGY annual licensing fee approach.

Tier-1 sees B2C operators that generate less than £20m GGY per year charged £50,000. Operators that generate a yearly GGY above £100m will pay an annual licence fee of £100,000.

The framework’s top bracket will apply a charge of £200,000 on B2C operators that generate an annual GGY above £300m.

The consultation document confirmed that B2C licences will apply to operators using third-party white labelling services.

Desired amendments to the Gambling Act will see Gibraltar split the classification of services offered by B2B remote gambling suppliers.   

Reflective of changes, a new B2B licensing framework proposes that suppliers be split into the categories of Aggregator, Direct Licensing (software services) and Platforms.

B2B suppliers classified as Aggregators will face an ‘annual basic fee’ of £85,000. For each new vertical added to their offering Aggregators will be charged an ‘additional basic fee’ of £15,000.

In addition to the licensing levies, Aggregators will be charged “an annual fee equivalent to 1% of its gross revenue from all revenue derived through content supply hosted on its platform from a licence holder”.

Meanwhile, a per annum tiered licence fee system will be applied to suppliers classified as Direct Licensing (software services) providers.

Guaranteeing “unrestricted direct integrations to Gibraltar B2Cs (subject to regulatory approval)”, a full-service tier-1 licence for software suppliers will cost £85,000 per year.

Tier-2 software licences will be maintained at £50,000, for suppliers with less than £550,000 gross sales in respect to servicing Gibraltar B2C licensees.

Software suppliers that generate less than £200,000 sales from Gibraltar B2C licensees will be charged £20,000 per annum.

A final licensing category has been assigned for B2B Platform providers of sports betting, online casino, esports, CRM solutions and managed trading services.  

These providers will pay a basic annual fee of £85,000, alongside a further £15,000 fee for each additional vertical added to the same licence.

Additionally, sportsbook platform providers will be charged a £50,000 annual fee for the supply of betting data and content.

The consultation outlined that platform licensing costs would not be applied to B2C operators, which maintain their own stand-alone proprietary platforms and systems.

Policymakers stated that a tiered licensing framework is required to improve regulatory functions with regards to pre/post licensing, supervision of incumbents and the efficiency of regulatory resources.

Furthermore, the government requires a licensing framework reflective of the current igaming marketplace, as “M&A activity has led to operators of significantly increased size and scale”.