Gibraltar publishes consultation on new gambling legislation

On 31 May 2022, the Government of Gibraltar published a ‘Command Paper’ (that you can download below) by way of consultation on proposed legislation to repeal and replace its current gambling legislation, the Gambling Act 2005.

The foreword to that Paper states as follows:

Gibraltar’s historical and continuing successful hosting of the online gambling industry is the result of Government policies, reflected in licensing and regulatory legislative framework and practices based on a partnership of shared interests between Gibraltar and the industry. This acknowledges the need to create a supportive environment in which the industry can develop, grow and prosper, while at the same time protecting both Gibraltar and those established in the industry here from the adverse reputational consequences of bad and unacceptable practices. Gibraltar understands the needs of the industry, and welcomes its presence here. None of this will change.

But the industry, the technology with which it operates, its other needs and indeed, global attitudes to online gambling have changed since Gibraltar established its current licensing and regulatory framework in the Gambling Act 2005. In order for Gibraltar to remain an attractive, as well as a globally acknowledged reputable location for the industry, the Government considers that it is necessary to change the legislative framework to reflect the current needs and circumstances. To this end, the Government proposes to repeal and replace the Gambling Act 2005.

The draft Bill for a new Gambling Act (“the Bill”) is attached to this Command Paper. The scheme of the Bill has its origins in a report dated 29th March 2016 entitled “Gibraltar: Online Gambling – a vision for continuing success” (“the Report”). The Report, which reviewed the legislative, licensing and regulatory regime and related issues, was published and has itself been the subject of extensive, informal consultation.

However, like the Gambling Act 2005, the Bill also applies, as appropriate, to land – based gambling.

The Bill seeks to preserve and enshrine Gibraltar’s supportive and understanding approach to the proper and reasonable needs of the online gambling industry, while better equipping the licensing authority and the regulator to be responsive both to the changed and changing needs of the industry and also to Gibraltar’s regulatory objectives.

Broadly, the Bill seeks to establish more flexibility in relation to licensing (especially around the issue of equipment location), to extend the activities that require licensing and extend the categories of licenses, and to introduce formal processes, and greater transparency and accountability of decision-making by the licensing authority and the regulator. The Bill introduces a right of appeal to a new Gambling Appeals Tribunal. The Bill also introduces an “approved persons” regime requiring persons carrying out certain functions (regulated functions) to be approved by the regulator (regulated individuals). The Bill also introduces a regime in relation to changes in shareholder control of a licensed gambling operator. Finally, the Bill provides for an appropriate range of modern, regulatory investigatory and enforcement powers and sanctions. These are designed and intended to ensure that the licensing authority or the regulator (as the case may be) has the necessary options to ensure an appropriate and timely, but fair and proportionate response to regulatory and licensing contraventions.

Finally, the Bill intentionally draws from, and replicates parts of the Financial Services Act 2019. This is intended to facilitate the emergence of a “Gibraltar style and approach” to licensing and regulation of regulated industries, such as will facilitate professional understanding and familiarity, and consistency of approach, and to applicable jurisprudence in our courts.

Of particular note are the proposed gambling regulatory objectives which go beyond the three licensing objectives under the UK’s Gambling Act 2005,. Described as being “more specifically described in Schedule 1 to the Bill”, they are:

  1. the preservation of confidence in gambling markets
  2. the protection of consumers, especially children, young persons and problem gamblers
  3. the promotion of fair and responsible gambling
  4. preventing gambling being a source of crime, being associated with crime or being used to support or proliferate financial crime
  5. the public interest of Gibraltar including (but not limited to) its reputation and macro-economic interests,

Schedule 1 to the Bill implies that a more collaborative, reputational and sustainability-focused approach is proposed than that which currently exists under the UK’s gambling legislation. It reads as follows (with our emphasis added in bold):

REGULATORY OBJECTIVES

For the purposes of this Schedule, “the gambling system” means the gambling system operating in Gibraltar and includes gambling business.

The regulatory objectives specified in section 2(1) are more particularly described in this Schedule:

1. Reputation of Gibraltar.

The protection of the good reputation of Gibraltar objective is taking such action as required by the Government or is considered necessary by the Authority or the Commissioner in consultation with the gambling sector and with the consent of the Minister to preserve Gibraltar’s good reputation as a centre for gambling business.

2. The Protection of Consumers.

The protection of consumers’ objective is securing the appropriate degree of protection for consumers.

In considering what degree of protection may be appropriate, the Commissioner must have regard to:

  • the general principle that those providing gambling services should provide consumers with a level of care that is appropriate;
  • the differing degrees of risk involved in different kinds of gambling transaction;
  • the differing expectations that consumers may have in relation to different kinds of gambling transactions;
  • the needs that consumers may have for advice and accurate information; and
  • the general principle that consumers should take responsibility for their decisions.

3. Financial Crime.

The reduction of financial crime objective is reducing the extent to which it is possible for a business carried on by:

  • a licence holder ; or
  • a person carrying on gambling business without holding the necessary licence,

to be used for a purpose connected with financial crime.

In considering the reduction of financial crime objective, the Commissioner must, in particular, have regard to the necessity of:

  • licence holders being aware of the risk of their businesses being used in connection with the commission of financial crime;
  • licence holders taking appropriate measures (in relation to their administration and employment practices, the conduct of transactions by them and otherwise) to prevent financial crime, facilitate its detection and monitor its incidence;
  • licence holders devoting adequate resources to the matters mentioned in paragraph (b).

4. The public interest of Gibraltar

The public interest of Gibraltar means the wellbeing and protection of the collective interests of Gibraltar and its people and includes the international reputation of Gibraltar and its economic, social and political interests. Where the Minister gives a direction as to what constitutes the interests of Gibraltar in general or in relation to a particular matter, the Commissioner, the Authority, the Gambling Appeals Tribunal and a court shall consider the Minister’s direction to constitute the public interest of Gibraltar in any respect so directed.

The Command Paper concludes with the following words:

Comments on this Command Paper should clearly reference ‘Command Paper on a Bill for a new Gambling Act (CO1/2022)’ and be sent by email to gamblingconsultation@gibraltar.gov.gi or delivered no later than 31 August 2022 to: Gambling Division, Ministry of Digital and Financial Services HM Government of Gibraltar, Suite 812/813, Europort, Gibraltar GX11 1AA

Any comments received after this date are unlikely to be taken into account for the purposes of the relevant consultation.