Gibraltar-based gaming operators may soon pay more for licenses.

Gibraltar is getting ready to implement changes to its almost two-decades-old gambling laws concerning gambling license fees. The updates may feature a new tiered system for the fees where big operators will pay more than smaller gambling establishments.

The British Overseas Territory has launched a consultation for the new license fees to seek feedback before making any moves. Smaller startups and operators will benefit from these changes more as they will avoid paying sizable upfront financial commitments. Established companies with intentions to expand, on the other hand, will have to pay a higher amount than they do now.

In the current scheme, remote betting operators, as well as remote gaming, retail betting, and land-based gaming, had to pay £100,000 (US$111,950) each for their annual license fee. Meanwhile, B2B suppliers were mandated to pay an £85,000 (US$95,157) annual fee.

The Government of Gibraltar explained that “licensing fees for startup operators and small operators who are building for growth can be a disproportionate cost in the early stages of the life cycle of the business.”

To rectify this, it decided on a new tiered system to help remote gambling acquire gambling licenses based on the gross gambling yield (GGY) of the company.

Gambling operators are expected to apply for different licenses for every major gambling sector they operate, and the tiers are based on the GGY in each one.

In its proposal, the Government of Gibraltar explained that the changes would not affect the B2C’s gambling duty rates, and neither would it force B2B operators to pay gambling duties.

“For the avoidance of doubt, there are currently no plans to change gambling duty rates for B2Cs nor to impose gambling duty on B2B operators. However, we have sought to address the situation whereby additional licence fees will be sought from B2B aggregators on a proportionate basis, in line with growing revenues,” the government said.

According to the new proposal, operators with a GGY of over $300 million (US$335.85 million) would pay £200,000 (US$223,900). Operators that produce more than £20 million (US$22.39 million) but lower than £300 million would pay a fee of £100,000. The price for gaming operators with a GGY less than £20 million in any vertical is £50,000.

The institution of a betting intermediary license is yet another change that will impact the licensing structure. This will carry a £100,000 flat license fee for exchanges and similar businesses regardless of the size. This also applies to lottery licenses.

Marketing service providers, affiliates included, will receive a new license with a yearly £50,000 fee. This would only apply to companies that provide marketing services in Gibraltar or outside the city. Other businesses that offer services to operators based in Gibraltar are not included.

Software suppliers and aggregators will have different licenses rather than one supplier license. Aggregators that do business in a vertical like live casino or sports betting will be mandated to pay £85,000 every year as well as 1% of the company’s revenue. In cases where the organization is in multiple verticals, a £15,000 (US$16,792) increase is required.

“This is intended to capture additional fee income from the revenue of the content providers themselves, so the proposal assumes that aggregators will pass this on their hosted content providers through their charging mechanism. We welcome discussions with aggregators on business model impact,” the government said.

The changes also affect the software suppliers, including providers for betting or gaming platforms. They will be grouped into three categories; the first includes the companies making below £200,000 in sales from operators with Gibraltar. They were to pay £20,000 annually.

The second category will feature a £50,000 annual fee for suppliers reeling in up to £550,000. Any supplier earning more than that is mandated to turn in £85,000 yearly. Betting data providers and other firms that supply ancillary services will pay £50,000 annually, regardless of the size of the business.

Gibraltar-based “holding entities” and fund management companies that do not fit in any of the previous categories will turn in £50,000 in license fees. According to the Gibraltar government, this applies “regardless of where in the ownership structure the Gibraltar-linked holding entity features.”

Lastly, a number of people are mandated to pay. An initial five-year license will require a £500 (US$559) fee, and a £200 ($US223) addition will be required if the license needs “material changes.” The government of Gibraltar will await feedback on the proposed changes until November 30.

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