Business is booming in Gibraltar where offshore gambling first took hold in 1989. The tiny territory has become a major player in the online gambling industry.
Business began on the island when gaming industry giants Victor Chandler and Ladbrokes set up shop to take sports wagers via phone and fax. Since then the industry has grown tremendously with the popularity of poker and now 15 companies have opened up business in Gibraltar including PartyGaming, Plc., which runs PartyPoker.com, and 888 Holdings, Plc., which operates 888.com and Pacific Poker.
That's a lot of growth for the tiny island and the companies have had to compete with each other to get and keep employees. More than 1,800 residents of Gibraltar are employed in the gaming sector, 12% of its total work force, and the companies have resorted to poaching each other's people as well as people from other industries with the lure of more money and benefits.
Law firms, accountant agencies, and other industries are losing people to the online gambling companies because they can't compete with the salaries being offered.
Gibraltar points to its reputation as one of the more reputable and well-regulated zones for the industry as a reason why the island has reeled in so many online gambling companies. They also have tax laws that are very favorable to the industry - Internet casinos and betting sites pay a maximum of $800,000 per year in taxes.
Unfortunately, Gibraltar's size does mean there's some limit to the amount of companies it can accommodate. The territory is already feeling the squeeze as firms try to find office space and housing for employees, which has led some company execs to believe that there probably won't be more setting up in Gibraltar in the near future.
Companies will have an alternative in 2007, however, when the U.K.'s 2005 Gambling Act is implemented allowing them to establish operations in Britain instead.
888.com Chief Executive John Anderson believes Gibraltar probably wouldn't be losing much business to Britain, though, because the Gibraltar government has been so accommodating and understands the industry, plus the tax situation enables firms to return more to the shareholders.