Bet365 Shifts Operations to Malta Ahead of Brexit
In preparation for the UK's departure from the EU in 2019, it looks like the British sports betting company Bet365 is shifting its offshore operations from Gibraltar to Malta. While this move could potentially serve as a trend, Bet365 insists that Brexit has only a minor role in their decision.
At the moment, Bet365, the largest British bookmaker, has confirmed plans to lease a new office complex in the holiday destination of Sliema on the northeastern coast of the British territory of Malta. In exchange for this, the privately owned company of Stoke-on-Trent, England, has agreed to pay 70 million euros immediately upon the official Brexit on March 29 next year.
According to an article in the Times of Malta, more than 1,000 employees have already relocated from Gibraltar to Malta. However, Bet365 denies these claims, insisting that they are merely expanding their operations in Malta. As a spokesperson for Bet365 states, "We are taking additional space and looking for additional employees in Malta to support our online business. We are also expanding our infrastructure there. However, the overall number of people moving to Malta remains imprecise."
The spokesperson for the company has also stated that only 500 employees are planned for the new location in Malta, the extent of the supposed relocation has been "exaggerated" in the media. Despite these plans for Malta, Bet365 maintains that they will continue to maintain a "strong presence in Gibraltar." The peninsula on the southern coast of Spain, home to a 426-meter limestone monolith, is still considered the most significant operational hub for the company.
Gibraltar's Conundrum
Although Gibraltar's Gaming Minister Albert Isola is optimistic about the territory's economic future in the face of Brexit, European media outlets, lawyers, and the industry itself view the future of the Rock as uncertain. The European Court of Justice in Luxembourg affirmed the United Kingdom's sovereignty over Gibraltar prior to the start of the Brexit negotiations back in 2017, with the UK and Gibraltar considered as one entity within the EU.
Currently, companies based in Gibraltar - predominantly from the gambling and financial sectors - pay just 1% in taxes. However, with the planned increase in the UK's online gambling tax from 15% to 20%, the consequences of Brexit in 2019 could drastically impact the Rock.
The industry publication EGR criticizes Bet365 for their strategy, claiming that the move is carefully planned to avoid the possible ramifications of Brexit. EGR also alleges that other companies, such as 888 Holdings and Paddy Power Betfair, have taken similar precautions.
In EGR's annual "Power 50" list ranking the 50 most powerful online gambling operators in the UK, Bet365 has held the top spot for eight consecutive years. Founded by Denise Coates in 2000, the company has become one of the largest in the gambling world, with over 23 million customers and over 3,500 employees. Denise Coates ranks as the highest-paid CEO in Britain.
Whether expansion or relocation, such actions taken by a company of this magnitude in such a politically volatile situation as Brexit invariably have repercussions. Gibraltar's British service providers may face a 20% online gambling tax after the official Brexit in 2019, which could be devastating for the territory. The gambling industry accounts for more than 50% of Gibraltar's GDP. Gibraltar's gambling minister since 2013, Albert Isola, is unfazed by this potential outcome, stating, "We understand that companies need security and need to manage risks. But what remains is that Gibraltar remains the choice of the most renowned online gambling companies in the world. Brexit will not change this."
