Online gaming has supercharged the local job market

One of the most interesting articles on the industry this week was carried by the BBC, which looked at the online gambling licensing jurisdiction of Gibraltar, a self governing territory neighbouring Spain which has close ties with Britain.

Such is the demand for staff, the article asserts, that online gambling companies like Party Poker are offering bounties of up to GBP 1 500 to staff members who recruit the right sort of smart young people.

Claiming that Gibraltar is becoming the capital of online gambling, the story reveals that there are now 15 such firms based there - many of whom are listed on the London stock market. Together they employ about 1 800 people, more than 12 percent of its workforce.

The territory's offshore gambling business began in 1989 and by the 1990s, the likes of Victor Chandler and Ladbrokes began taking sports wagers over the phone or by fax, offering lower tax on winnings than the high street bookies in the UK could offer.

But it is online gaming - driven largely by casino games and especially poker - which has taken things to a new level, turning over hundreds of millions of pounds every year.

"Gibraltar is a minute speck on the globe," says Freddie Ballester of the territory's Betting and Gaming Association. "But when it comes to internet gaming it is probably the most important jurisdiction in the world."

Gibraltar argues that its reputation as one of the more reputable and well-regulated zones for the industry has helped attract firms. But it is no secret that low taxes levied by the Gibraltar government are the biggest incentive. Under local laws, internet casinos and sports betting sites pay a maximum of GBP 425 000 ($800 000) a year in tax.

Not a bad deal, when PartyGaming made a GBP 308 million profit in 2005 and its smaller rival 888.com earned GBP 32.2 million, the article points out.

According to the author, an estimated 75 percent of gaming firm workers have moved to the territory from elsewhere specifically for jobs in the online gambling industry, exploiting the demand for experts in the field.

888.com CEO John Anderson was interviewed for the story, and is quoted as saying that he is "sick of training staff, only to lose them to rivals". But it is not just the gaming firms poaching one another's people. Other industries say they are being hit too.

Poker has been the real draw card for new online gamblers. "We are losing a lot of our best people to online gaming," a partner at a senior accountancy group said. "The law firms are feeling the same. We can't afford to match the salary packages they are offering them."

From next year, when the Gambling Act 2005 is implemented in the UK, online casinos will be permitted to operate from Britain. In June, culture minister Richard Caborn visited Gibraltar, ostensibly to see how the companies were run. But he was also having a quiet word with bosses, touting for firms to return to Britain, the article reveals.

Even if they were offered considerable tax breaks to return to the UK, it seems few of these offshore firms would be queuing up to base themselves there. "Although Gibraltar is being careful not to become too reliant on gaming in case it falls out of favour, I can't see it happening," Mr Ballester said.

And in his glass-walled office, complete with black and white posters of Muhammad Ali and Marlon Brando, Anderson echoes those views. "The Gibraltar government want us here and it makes it very attractive, so I can't see the industry moving from here," he said. "They have a government that understands the needs of business and the tax situation means we can return more to our shareholders. That's my job."

Online Casino News courtesy of InfoPowa