Regardless of how people voted, everyone agrees that Brexit was a big gamble by former Prime Minister David Cameron. Whether the United Kingdom itself won or lost remains to be seen, and more recently attention has turned to territories beyond the island nation, with Theresa May coming out fighting for the future of Gibraltar.
Not only is Gibraltar strategically placed on the Straits that separate Europe from Africa, it is also a hub for the online gaming industry. The British overseas territory is one of Europe's most hotly contested areas, as it shares its only land border with Spain.
More than 30,000 citizens live and work in the shadow of the famous Rock, and in the last referendum on its sovereignty in 2002, 99% of the population voted to remain British, rejecting an attempt by Spain to have joint sovereignty.
Despite its size and near location to Spain, the small peninsula of Gibraltar has traded owners numerous times throughout history. Following the collapse of Rome, the Rock came under Moorish rule and was renamed Jebel Tariq, which degraded over time into Gibraltar.
It was taken over by Spain, who then lost it temporarily in a war with Austria and an Anglo-Dutch fleet. By the end of the bloody saga, Spain gave up Gibraltar to Great Britain in 1713. Since then, Spain has tried to claim it back several times.
During Tony Blair’s time as Labour Prime Minister, plans were in place to discuss different sovereignty agreements with Spain. With the impending Brexit negotiations, Spain might finally have a chance to reclaim Gibraltar – not through force, but economics.
A New Deal
While the ink on the Article 50 trigger letter was still drying after it was delivered to the EU President, reports flooded the media that Spain was going to seize on Brexit and demand Gibraltar be included in any trade deals. This was then blown out of proportion when ex-Conservative leader Michael Howard claimed Theresa May would go to war over the territory.
May laughed this off, while Spain called for cooler heads to prevail. But Foreign Minister Boris Johnson could not help but stoke the fires when he commented that:
"Gibraltar is not for sale. Gibraltar cannot be traded. Gibraltar will not be bargained away."
Yet no one could deny that the landscape has changed, and that a new deal will have to be reached. As former Labour Foreign Secretary Jack Straw noted:
"It’s in the interests of Gibraltarians for there to be some kind of deal done with the Spanish in the new circumstances, circumstances which the Gibraltarians didn’t want, because they voted in very substantial numbers to stay within the European Union."
Taxes and Single Market
The people of Gibraltar voted to remain part of the EU. Not only was the result of the referendum almost unanimous, with only 4% of voters selecting Leave, it had a huge turnout with more than 84% of the population making their way to the polling booths. Not only that, but there has also been a decisive shift about whether being part of Britain is damaging Gibraltar’s economy.
In January 2017, the European Court of Justice ruled that, with regard to taxation and services, Gibraltar and the UK were classed as one entity. The challenge, raised by lawyers acting on behalf of Gibraltar’s flourishing gambling industry, was in response to the UK trying to impose new taxes on online gaming in 2014.
Gibraltar’s attractive rates for online casinos, with a basic corporation tax of 10% and 1% gaming tax, is the reason it has attracted so many companies over the years. Now that it is likely to lose access to the EU single market, Gibraltar itself may be open to a different deal, especially if any gambling companies show signs of moving off the Rock.
Former Labour Minister of State for Europe Peter Hain has suggested a solution, one that he tried to push through 15 years ago. He proposes that Spain and Great Britain have joint sovereignty over the peninsula, in the same way that France and Spain do with Andorra. However, both Britain and Spain have higher rates of tax on gambling, leaving Gibraltar stuck between a rock and a hard place.
Some of the world's biggest gambling operators are already mulling over a Gibraltar exit following the Brexit decision. 888 Holdings, long considered one of the UK's top gambling operators, is considering a move that would take their headquarters from Gibraltar and move it to a similar jurisdiction with less legal headache, Malta. If you're interested in exploring a Gibraltar-based casino, simply visit 888casino today!
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