888 Holdings is looking into alternative locations for its headquarters in the wake of the UK’s exit from the European Union. The gambling operator is currently based in Gibraltar, one of the world's top licensing jurisdictions, but revealed in a report that it’s considering a move to Malta should Gibraltar be negatively affected by Brexit.
888 is the first company in the industry to express concerns publicly about the potential impact of Brexit on its operations. In its 2016 annual report, the company stressed that it would retain a presence on ‘the Rock’ but may relocate its headquarters to Malta, where it would be guaranteed full access to the European single market.
The European market has been key to 888’s continued development and success in recent years, and is at the forefront of the company’s strategy. In March, 888 revealed that it had experienced significant growth for the full year of 2016, with revenue jumping 13% year-on-year to €491.9m and adjusted earnings before interest, tax, depreciation and amortisation incrementing 12% to €90.2m.
Gibraltar has been at the centre of political debate in recent weeks amid fears that Spain could use Brexit negotiations to reassert its claim over the territory. The EU has said any post-Brexit trade deal between the UK and the EU regarding Gibraltar would have to be approved by Spain.
Gibraltar has been a British colony since 1830 and voted overwhelmingly to remain under sole sovereignty of the UK in a referendum in 2002. However, its citizens also voted to stay in the EU.
Last January, the European Court of Justice (ECJ) ruled that the UK and Gibraltar should be deemed a ‘single entity’ in their freedom to provide business services, making it unlikely that the EU will grant the British Overseas Territory any dispensation to access the EU common market.
Should Gibraltar’s access to the European market be reduced, it looks likely that 888 Holdings will seek to base its headquarters in another territory, and other betting companies with operations on 'the Rock' may well follow suit.
There is also the issue of licensing compliance. Once the UK – including Gibraltar – exits the Union, 888 Holdings’ Remote Gambling licence in Gibraltar may not be recognised by member states and may therefore not be sufficient for the company to comply with regulations. The annual report outlines the position:
"The proposed status of Gibraltar in relation to the United Kingdom as a result of ‘Brexit’ is at present unclear. If 888 were to remain registered, licensed and operating in Gibraltar in these circumstances, its ability to rely on EU freedom of services/establishment principles in supplying its services within the EU will be limited."
Gibraltar has become a hub for the gambling industry over the past couple of decades, with dozens of online casino and betting companies setting up bases there, mainly due to its low corporate tax rate and its position within Europe. 32Red, William Hill and Ladbrokes are just some of the gambling heavyweights that have operations in the territory.
The industry makes up a huge part of the economy in Gibraltar, employing thousands of people many of whom are British expats. Given the fact that so many multinational companies have a presence there, free trade within the European market is important in sustaining Gibraltar’s economic success and affluence.
However, Malta is similarly popular in the gambling industry, so if 888 Holdings were to relocate there it wouldn’t have too much difficulty settling into its new home. As a former British colony, Malta is part of the Commonwealth and as such has a large British population. And like Gibraltar, it’s seen as a tax haven. Many gambling operators also have operations in Malta but the country is also a full member of the European Union.
As the report points out, Gibraltar’s status is unclear at this stage with Brexit negotiations still to start, so it’s not yet known what the impact of Brexit will be. The British Government has reaffirmed its commitment to securing Gibraltar’s interests, which has been welcomed by Gibraltar’s Chief Minister Fabian Picardo.
What’s certain is that gambling companies like 888 Holdings with operations in the area will be keeping a close eye on developments over the coming months and years. And if they were to relocate post-Brexit, it could have very damaging consequences for ‘the Rock’. To enjoy 888 and their wide range of products, head to their topnotch site today!