Gibraltar: Industry must control its own ESG destiny

Set against the backdrop of the glorious Gibraltar sunshine, the third iteration of the Ethical Gambling Forum sprung into action this week aboard a superyacht whose name will be familiar to many across the industry – the sublime Sunborn.

Beginning proceedings, Co-Founder Adrian Sladdin promised “something a little bit different”, before a tentative “be prepared” word of warning was offered as the ESG focus, noted as “something the as should all embrace”, of the two-days came to the fore amid a shifting landscape across the industry. 

“The pace over the last seven months has been relentless,” opening keynote Nigel Feetham, Minister for Justice, Trade and Industry, who officially assumed office on October 13, 2023, began his opening address.  

In a wide-ranging ten minute speech, attention was first reserved for that of the significance of the country’s licensing regime, overall value of the industry to Gibraltar and potential expansion that could be looming on the horizon.

“The underlying premise in licensing gambling companies in Gibraltar, both B2C and B2B, is one of them establishing substance in Gibraltar for the good of the economy, behaving responsibly in their approach to consumers from a fairness and protection perspective, keeping crime out of gambling and ensuring they uphold the good reputation of Gibraltar. 

“The industry is important to Gibraltar in terms of its economic contribution”

“The industry is important to Gibraltar in terms of its economic contribution and the industry is highly valued. 

“I have repeated this message on many occasions since taking office. Although I recognise the importance of UK facing business for our gaming sectors, I am eager, as I am in the financial services sector more broadly, and especially regarding UK focused business, to expand into international and non UK markets whenever feasible.  

“This strategy aligns with the goal of bolstering our economy’s resilience and reducing reliance on a single market.”

However, as was a key message throughout, Feetham was quick to point out that despite the advantages, being licensed in Gibraltar comes with a comprehensive set of responsibilities.

At a basic level, the minister noted a range of compliance measures concerning the Gambling Act, Privileges of Crime Act, Companies Act, employment law and tax legislation, as well as conducting themselves in a transparent and open way with the government.

This saw attention shift to a key responsibility that falls at Feetham’s feet. Optimising tax yield to deliver a range of societal benefits across the likes of schooling, social and assisted housing, healthcare and subsidised utilities.

“The advantage of my wide brief is that it allows me to take a 360 degree view through the departments and agencies I am responsible for,” he continued.

“I want the benefit individual operators bring to Gibraltar. There is very much a focus on a joined up approach and not allowing a siloed approach.”

“…trust and demonstration of fitness and propriety is an integral part of our regulatory  approach”

A call was subsequently made for thoughts to be cast to the wider economic contributions and compliance, with Feetham touching on the payment of proportional tax, up to date filings, wider societal contributions regarding diversity and inclusion, employee support, charitable giving and if there is a reputational risk for the territory in a company’s approach.

“In its broadest terms, what is the company giving back to Gibraltar? Or how is it supporting Gibraltar in relation to the risk Gibraltar is taking in licensing it here?, he explained. 

“The licensed gambling sector must meet a contract of trust that should exist between government and the business community. That trust and demonstration of fitness and propriety is an integral part of our regulatory  approach. 

“We know from experience elsewhere that no operator is too big to fail if it does not meet the integrity threshold.  Our view is that a company that is over commercially aggressive or deficient in one area is likely to be deficient in others.  

“It is not enough to abide by the letter of the rule. And the spirit of ethical compliance is just as important with culture being driven from the top in the form of senior management.”

“Gibraltar backs entrepreneurial drive but never at all costs and certainly not at the expense of our reputation.” 

A little over three years ago, The University of Gibraltar disclosed the creation of a Center of Excellence in Responsible Gaming, with Feetham calling for the industry’s assistance in maintaining running costs.

Following initial capital coming from past regulatory settlements, a request has been made for £1m of voluntary funding per year to help run the centre, with an alternative being a compulsory contribution scheme for consultation under the Fourth Coming Gambling Act.

“…there will be situations where if the industry fails to act, the government will have to intervene for the good of the wider community”

This, he alluded to, could be based on a percentage of gross gambling yield or for B2B’s net revenue to be collected with gaming duties and charges.

“And yet by saying in the context of ESG obligations, that there will be situations where if the industry fails to act, the government will have to intervene for the good of the wider community. 

“Self regulation is of course always better and less expensive, but that means industry keeping ahead of the curve and controlling its own destiny.”

As time drew to a close, Feetham quoted former US President Ronald Reagan, who once said “I think you all know that I’ve always felt the nine most terrifying words in the English language are: I’m from the government, and I’m here to help”.

In an update to this statement made by the 40th individual to occupy the famous seat, he closed: “I say this. Hello, I’m from the government. I value your presence in Gibraltar, and would appreciate you working alongside my government for the good of the wider community.”