How Gibraltar became a force to be reckoned with in Online Gambling
An iconic gateway to the Mediterranean, in the southwestern most corner, the once proclaimed long-forgotten British-owned backwater of Gibraltar now glowers in belligerence at all those who had all but cast it aside.
The story about the reawakening of a sleeping giant and how the ‘rock’ emerged from what could only be described as a light doze makes for fascinating bedtime reading. Indeed, actually seeing the place in the flesh you are soon of the realisation that Gibraltar has had more than its fair share of beauty sleep.
Once predominantly a sole stronghold of military might, this strategically positioned annexe had a number of advantages; today British armed forces still use this as a training base. Also a base for what some may consider a strange quirk; monkeys right at the top of the rock, this certainly adds to the charm. However, little over a decade ago, one man considered a luminary solely motivated the upward surge of the economy.
The Victor Chandler Effect
When the British businessman, Victor Chandler, identified an opportunity and re-located his entire bookmaking operation to Gibraltar in the late nineties, it wasn’t without its fair share of challenges. Obtaining a betting license for the region was the first obstacle to overcome, while the logistics of such a move was not dissimilar to a major military operation.
This came at a time when Gibraltar was in dire need of a facelift. The place solely relied on tourism for its income, while unemployment levels were at an all time high. Bringing with him in excess of 80 initial employees, Victor Chandler became the first bookmaker to move everything solely online.
It meant that a number of personnel were needed for the different functions across a number of departments and as a result, Gibraltar became noticeably more busy. Chandler meanwhile, had started to attract envious glances from competitors who realised the tax benefits that the company was receiving.
Not long after, other companies began to follow. Keen to not be left behind, William Hill, Ladbrokes, Coral, Stan James all moved from the UK to reap the rewards. While some still kept bases in the UK, it was clear to see that the largest part of their respective operations was in Gibraltar.
It would be easy to imagine Chandler sitting behind his desk stroking a cat; an almost real-life Godfather of sorts, however, as opposed to the movie everything here was legal and above board. Despite this, what Chandler achieved during his tenure however, was still of the proportions worthy of a box office movie.
As more and more gambling companies moved in, the fortunes of Gibraltar began to change. Bringing significant levels of employment to the area, this led to a revamp of the infrastructure with new hotels, bars and shops created in order to meet the needs of the many employees who were flocking to the colony in their hundreds.
A stark contrast to the commuter town in next door neighbour Spain; La Linea, a typically struggling fishing town, Gibraltar, almost overnight became a place for the well to do. The salaries offered by the gambling companies in order to attract top talent meant that the economy boomed, with each one competing with one another to hire the best.
Victor Chandler went through various rebrands throughout the early to mid 2000s, before establishing itself as BetVictor with the company the single largest employer on the ‘rock’ with in excess of 400 employees. Victor himself has made one of the biggest fortunes from gambling.
Establishment Of An Online Gambling Stronghold
While Victor Chandler can take credit for initiating an upward surge of a revolution in Gibraltar, it could be argued that others definitely played their part.
Attracting a host of other companies, perhaps one that does not get the recognition is Stan James, who are now part of Unibet following a takeover by the Swedish company (and no longer exist as Stan James). The brand actually has humble beginnings, starting as a single betting shop in Oxfordshire in 1973 and like Chandler, steadily grew before migrating south.
It was arguably the move of the ‘big three’ bookmakers (William Hill, Coral and Ladbrokes), which you could claim really helped to position Gibraltar as a leading gambling authority though. When each one followed suit and moved a portion of their companies to the British colony, it became steadily obvious that this wasn’t built on a house of cards.
Although each company retained bases in the UK (William Hill adding further locations), Gibraltar became one of the main draws for existing and new employees, seeking a change in lifestyle comprising 300 days of sunshine every year, a more relaxed pace and being only seven a mile ferry ride from Morocco.
William Hill, however, was relatively smaller in headcount especially when comparing it to BetVictor, while Coral and Ladbrokes had slightly more people. A lot of this is to do with the fact that each company had various functions elsewhere; for example a significant amount of Coral’s PR department was and still is based in London.
GVC influence on Gibraltar
Without a doubt, one of the biggest gambling organisations in the world with in excess of 25 brands underneath it, GVC Holdings are a powerhouse and have a significant grip on Gibraltar. Like the colony that they appear to dominate however, they were once a humble entity.
Founded in Luxembourg in 2004, at a time when Gibraltar was just starting to reap the benefits brought to it by the gambling industry, GVC had undoubtedly identified this as a highly attractive hotbed.
While they are a global force, the fact remains that the majority of the companies that they own which are based in Gibraltar serve a wide range of markets across multiple territories, though they are not the only ones.
Although there is no apparent monkey business, it is clear that GVC is the King Kong of the ‘Rock’ and can definitely beat its chest to the sound of its orchestra of businesses clearly making music in the background.
In 2016, the acquisition of Bwin, who are also based in Gibraltar really started to put GVC on the map, having already being a co-owner of Sporting Bet along with William Hill, though they weren’t done there.
Later that year, various social circles around the bars of Gibraltar were abuzz with the news of a rumoured merger of two of its heavyweights. Coral and Ladbrokes had reportedly been in talks and whispers of potential redundancies and what this meant for the futures of various employees became a hot topic in a place that was dominated by the online gambling industry.
When this eventually went through in 2016, life in the Gibraltar offices of Ladbrokes and Coral remained largely unchanged. Indeed, these were still separate entities and each one retained their own premises, at least for a while.
However, GVC was keeping an eye on the situation. A little over a year later (December 2017), the company swooped, acquiring the newly formed Ladbrokes-Coral for a cool £4 billion after six months of rumours about a new owner. This time, there were substantial changes. Both brands effectively moved under one roof in Gibraltar, despite still remaining separate.
GVC took advantage of being based in Gibraltar to go shopping further, adding recruits from other companies as it embarked on a mission to try and blow their competition out of the water.
Software Providers On The Doorstep
Another important element in the online gambling industry, which is often largely overlooked is the software providers and players especially do not realise that games are mostly developed by third party companies.
Arguably the most notable is Playtech who were one of the first to establish themselves on the ‘Rock’ and take advantage of the amount of online gambling firms moving their operations. Indeed, this led to a lucrative deal with giant William Hill taking advantage of their proximity with each other. Subsequently, Playtech grew its portfolio of clients, firmly cementing itself as one of the most popular software providers in Gibraltar.
In addition, other top names such as Yggdrasil Gaming and Pragmatic Play can be credited for having strategic bases in Gibraltar with these geographically convenient software providers and online gambling firms creating idyllic synergystic alliances with each other.
Having software providers in Gibraltar have proven to be a huge advantage for the online gambling industry and many do not realise why. The fact is that Gibraltar, compared to somewhere like London is considerably smaller which makes it an ideal place for companies to do business. Add into the equation that the relaxed pace of the day and the surroundings provide perfect complementary factors, it means that deals can be struck relatively easy.
Brexit And Gibraltar’s Online Gambling landscape
Brexit was always going to cause some kind of disruption for Gibraltar, especially for those companies who had operations in multiple territories. While those companies such as BetVictor who were solely based there made it their staunch goal to make sure that Brexit would not affect them and continue to grow, there were others that quite simply could not justify keeping their Gibraltar bases running and subsequently moved for a more favourable deal.
Gibraltar, meanwhile, did not concede this easily. Two companies; 888 and Bet365 were two of those companies considering relocation and they had already found their location. Post Brexit, the growing online gambling region of Malta became increasingly more favourable to online gambling companies for its much better tax benefits and this is something that both 888 and Bet365 were looking into. Bet365 even agreed a €70m promise of sale deal for the acquisition of a new property development in Sliema with the intention of making it is Maltese base.
Gibraltar’s Minister for Gambling, Albert Isola remained reasonably bullish about the situation, stating at the time:
“There is no single risk management solution here as the issues are complex. Bet365 have confirmed directly to us that they remain totally committed to Gibraltar and the entirety of its workforce here. They are not leaving Gibraltar by any stretch of the imagination. Neither do they have to choose between us and Malta. What remains true is that Gibraltar remains the jurisdiction of choice for the most reputable gaming companies in the world. BREXIT isn't going to change that.”
The Future Of The Gambling Industry In Gibraltar
With the situation starting to stabilise somewhat in relation to Brexit, Gibraltar can once again look ahead to the future with a new sense of optimism. A strong indication of how the future appears, is the fact that the Gibraltar based gambling firms are still following an aggressive hiring campaign and this coupled with the creation of new markets and products is a great sign.
In addition to this, the region is also a hotbed for technology; great news for an industry that has unlimited potential to not only grow but also to diversify its product offering; something which the likes of BetVictor have been doing since Chandler moved the company there in the beginning. It would come as little surprise to see more technology companies establish themselves in Gibraltar to really take advantage of what could well be beneficial partnerships for both them and the online casinos themselves.
What many people do not realise is that Gibraltar also plays home to two real life casinos; both impressive structures and based on the floating tourist resort of Ocean Village. While the online casinos attract players in their millions on a daily basis, these casinos are often always packed with regulars as well as tourists who flock there in their numbers.
The fact is that Gibraltar and gambling is always likely to be synonymous for many more years to come after a successful run of more than two decades. While it might be starting to cast envious glances east across the Mediterranean to its Malta counterpart, it is highly unlikely that there will be a further exodus of companies. You would certainly get long odds on every gambling company pulling out of Gibraltar, however, other global events might just start those dominoes to wobble.