Paddy Power Betfair to Exit, Maybe Brexit, Gibraltar
Whether or not the United Kingdom’s looming “Brexit” departure from the European Union, and how that exit plays into the future of the online-gambling industry in the UK-controlled Gibraltar protectorate, is on industry watchers’ minds this week following the news that Paddy Power Betfair will be closing its corporate office in Gibraltar.
The story broke via a local Gibraltar news outlet and has since been confirmed by Paddy Power Betfair officials. Paddy’s Gibraltar staff numbers only 20 employees or so, and some or all of them may be relocated to Paddy’s Dublin or London offices. It does not seem as though any of the employees would be relocated to Malta, where Paddy has another, growing office that is more securely positioned regarding PPB services to the rest of the European Union.
And yet, according to several reports, Paddy officials deny that the pending closure of the office on “The Rock” is connected in any way to Brexit. Instead, according to those unspecified Paddy sources, the company had been “reviewing arrangements with the aim of simplifying and centralising operations.” Paddy Power Betfair representatives instad claim that the Gibraltar office closure has been in the work all along, as a part of the “operational review” undertaken following the merger of Paddy and Betfair last year.
Okay, whatever you say, Paddy; we love you anyway. The undeniable truth is that with Brexit looming and with the changes to the UK’s remote-gambling tax code, most of the tax advantage online operators gained from incorporating in Gibraltar have been neutarlized. Paddy Power Betfair might be the first operator to pull up its Gibraltar staks, but it’s a safe bet the veteran company won’t be the last.
It was only about seven weeks ago that Euro giant 888 Holdings Plc confirmed that it, too, was looking into a move to Malta. If that happens, such a move would involve significantly more than the 20 employees facing relocation or unemployment because of the pending Paddy exodus. Malta, an island located south of Sicily and Italy, in the Mediterranean Sea, is still the odds-on favorite to become the next sweet spot (the most favorable locale from which to do business) for operators serving the majority of the EU. Malta has also been looking forward into initiatives such as regulated blockchain technology and a national betting exchange. Those and other concepts represent part of the wave of the future for online-gambling operators.
As for Paddy, it still maintains other offices throughout the European sphere in addition to either Malta or Gibraltar, which makes the “No, it’s not Brexit” line even a little less credible. Besides Paddy’s historic offices in Ireland, the company maintains other corporate presences in England (UK), Italy, Portugal, and Romania. Some of that infrastructure arrived via that Paddy Power / Betfair merger last February, in what was essentially a marriage of equal-sized companies.
The nature of providing online gambling services throughout Europe continues to increase in complexity. Mired amid all that the entire “Gibraltar” question remains. Paddy Power Betfair thinks the time is ripe to move, and, despite assurances to the contrary, it’s a safe bet other operators will follow.
- Paddy Power Betfair