Ethical Gambling Forum –
I was grateful to be asked to open this conference focussed on the ESG aspects of the gambling Industry.
Before assuming office on October 13th of last year, I spent 31 years practicing law in Gibraltar, with a primary focus on the financial services sector, although I also had professional involvement in the gaming sector. During my career, I attained the honour of being appointed as a King's Counsel (then Queen’s Counsel) and also served as a Visiting Professor of Law at a university in the United Kingdom. Additionally, I have co-authored several law books.
As Minister, I am now the Licensing Authority in Gibraltar (assisted by the Gambling Division), among other Ministerial responsibilities.
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 and the industry is highly valued. I have repeated this message on many occasions since taking Office.
Although I recognise the importance of U.K. facing business for our gaming operators, I am eager, as I am in the financial services sector more broadly and especially regarding U.K. motor business, to expand into international non-U.K. markets whenever feasible. This strategy aligns with the goal of bolstering our economy's resilience and reducing reliance on a single market.
That said, being licensed in Gibraltar, which brings with it many advantages, also comes with responsibilities.
At a basic compliance level that means:
• Complying with the Gambling Act
• Complying with the Proceeds of Crime Act
• Complying with the Companies Act
• Complying with employment law
• Complying with the Tax legislation; and
• Conducting themselves in a transparent and open way with Government
As Minister for Justice, Trade and industry, the brief given to me by the Chief Minister is wide and includes responsibility for optimising tax yield. Tax provides societal benefit: schools, 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, about the benefit individual operators bring to Gibraltar. There is very much a focus on a joined-up approach and not allowing a siloed approach. I have articulated my views publicly that when looking at regulated sectors, financial and gambling regulators should look beyond sectoral regulatory requirements and to think about wider economic contribution and compliance culture in the round. For example, is a Group structure approach to multi- jurisdictional tax planning ensuring a proportionate amount of tax is being paid in the jurisdiction in which the operation is based (and where it derives other benefits)?
Are the tax policies designed to remove profit e.g. through brand and IP payments from a low tax jurisdiction to a no tax jurisdiction?
Are financial and Company filings up to date?
Is the company more widely making a societal contribution by engaging in the diversity and inclusion debate?
Does the company put its money where its mouth is in terms of employee support and charitable giving?
Taking that further, is there a reputational risk for Gibraltar in the 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?
The licensed gambling sector must meet the 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 that 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 law and the spirit of ethical compliance is just as important with culture being driven from the top in the form of senior management.
Seeing a level of commitment to environmental, social and other factors and being committed to good governance provides greater assurance to regulators and Government that we are licensing good corporate citizens and those that can be trusted to guard the reputation of Gibraltar. That is important to my Government and to me in particular as Minister with responsibility for this area.
Gibraltar backs entrepreneurial drive but never at all costs and certainly not at the expense of our reputation.
Finally, we are proud of our Centre of Excellence for Responsible Gambling at Gibraltar University. Some funding was provided by regulatory settlements, but not all regulatory settlement money should be used for this purpose.
We have asked the industry to come up with a voluntary funding scheme that would raise around £1 million per annum to run the centre.
The alternative is for the Gambling Commissioner to design a compulsory contribution scheme for consultation under the forthcoming Gambling Act which may be based on a percentage of gross gambling yield or for B2Bs net revenue. To be collected with gaming duties and charges.
I end by saying in the context of ESG obligations, that there will be situations where if the Industry fails to act, the Government would have to intervene for the good of the wider community.
Self -regulation, of course, is always better and less expensive, but that means industry keeping ahead of the curve and controlling its own destiny.
I was reminded recently of a quote from former US President Ronald Regan. It went along the lines of:
Some of the most frightening words in the English language (for business) are: “Hello I am from the Government and I am here to help you!”
My approach is different, unsurprisingly so; as a Socialist Labour Minister, I unapologetically do not subscribe to Professor Hayek’s neoliberal philosophy and I say:
Hello, I am from the Government. I value your presence in Gibraltar and would appreciate you
working alongside the Government for the good of the wider community.