On January 19, 2017, Advocate General (“AG”) Szpunar delivered his Opinion in case C-591/15, The Gibraltar Betting and Gaming Association Ltd.  In this case, the Court of Justice of the EU (“CJEU”) must decide whether Gibraltar and the UK are to be treated as if they were part of a single Member State for the purposes of EU law.  Alternatively, the UK High Court asked the CJEU whether Gibraltar should be considered a separate territory to the UK within the EU, or simply a non-EU Member State.   Depending on the answer to this question, free movement of services does, or does not apply between the UK and Gibraltar (Article 56 TFEU).

The Gibraltar Betting and Gaming Association (“GBGA”) initiated the case against the recent UK remote gambling point of consumption tax. The new  tax requires all online gambling operators that provide services to UK residents to pay a 15% tax on the so-called gross gaming revenue (“GGR”).  This would significantly impact online gaming companies.

This post analyzes the Opinion of AG Szpunar on the questions posed by the UK Court. Should the Court follow the AG, and as a consequence of Brexit, the impact for the online gaming industry in the UK and Gibraltar will be significant.

AG Opinion: Single Member State

In his Opinion, the AG argues that EU law applies to Gibraltar, as a territory for whose external relations are managed by another Member State, based on a combined reading of Articles 52 and 355(3) TFEU. This has several consequences: (i) should Gibraltar commit a breach of EU law, legal proceedings must not be initiated against Gibraltar, but against the UK; (ii) Gibraltar is not entitled to initiate proceedings against a deficient Member State since only the UK holds this right (see § 38).

In light of this, the AG argues that free movement of services does not apply to the relationship between the UK and Gibraltar. In his opinion, the 15% tax should be considered a “purely internal situation” to the United Kingdom as a single entity, so that Article 56 TFEU does not apply to trade between Gibraltar and the UK (see § 22).  Note, of course, that an AG Opinion is not binding on the Court, although they are often followed by the CJEU.

Possible Consequences for the Online Gaming Industry 

Should the CJEU follow the AG Opinion, in the light of Brexit, consequences for the Gibraltar-based online gaming operators may be significant.

First, for the purposes of EU law, the assimilation between Gibraltar and the UK as a single Member State would mean that Brexit would impact Gibraltar identically as it does the UK. If the United Kingdom leaves, so does Gibraltar.  If the Gibraltar-based online gaming industry wishes to retain access to the EU internal market, a special arrangement will need to be negotiated.

Second, in light of the ‘hard Brexit’ announced by Theresa May on January 17, 2017, the UK (and thus Gibraltar) will likely be treated as a third country. Since the UK Prime Minister wishes to negotiate a Free Trade Agreement (“FTA”) with the EU, this does not bode well for the Gibraltar-based online gaming industry.  In the past, the EU has consistently refused to make market access commitments on gambling services in FTAs with third countries.  Concretely, an analysis of the FTAs with Peru and Colombia, and South Korea, shows that the European Union has consistently excluded gambling commitments in its agreements with those countries, even if its counterparts have undertaken commitments in this service sector.

Conclusion

In summary, if the CJEU follows its AG, and decides that the UK and Gibraltar are a single Member State for the purposes of EU law, the online gaming sector in the UK will need to ensure that Gibraltar is not forgotten in the agreement to be negotiated between the EU and the UK following Brexit. If not, Gibraltar-based online gaming providers will be deprived from offering their services into the EU internal market, unless they relocate to an EU Member State.

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Photo of Bart Van Vooren Bart Van Vooren

Bart Van Vooren, partner leads a dynamic practice at the intersection of EU regulatory law, global health, and biodiversity law. In these fields, he advises innovative pharmaceutical, food, cosmetic and technology companies on complex EU and global regulatory, compliance and policy assignments.

Bart…

Bart Van Vooren, partner leads a dynamic practice at the intersection of EU regulatory law, global health, and biodiversity law. In these fields, he advises innovative pharmaceutical, food, cosmetic and technology companies on complex EU and global regulatory, compliance and policy assignments.

Bart holds a Ph.D. in EU and International Law and was a professor of EU law until 2013. During that time, he wrote the first-ever handbook with Cambridge University Press on “EU External Relations Law” (2014). He then transitioned to private practice, and frequently acted for the Belgian government before the EU Court of Justice (e.g. C-16/16P Belgium vs Commission). Bart joined Covington in 2016, leading some of our most consequential EU litigation proceedings (e.g. C-311/18 “Schrems II”) over the years.  Having handled nearly 50 cases before the EU Court, he’s uniquely qualified to support our corporate clients in our most high-stakes disputes. Recent examples include T-189/21 Aloe Vera of Europe v Commission (which we won, so the Commission decided to appeal); as well as T-201/21 Covington & Burling and Van Vooren v Commission (which we also won, and hence is also on appeal).

As a pioneer in biodiversity law, over the past 15 years Bart has built a unique, global practice on Access and Benefit-Sharing (ABS) laws under the Convention on Biological Diversity, the Nagoya Protocol, the Plant Treaty, the High Seas Treaty and the WHO Pandemic Agreement. ABS compliance is critical when sourcing biological materials for life sciences R&D and I work with many of the world’s innovative life sciences companies on the whole range of e.g. transactional, contractual, compliance, IP, (EU) regulatory and litigation work relating to ABS. As biodiversity has increasingly become identified as a major commercial and financial risk to companies, so has the practice expanded to e.g. biodiversity credit markets, biodiversity insurance, biodiversity claims and advertising, and so on. Since April 2025, Bart has been appointed as the industry representative to the Steering Committee of the UN Biodiversity Fund that seeks funding from the private sector for biodiversity conservation and restoration.

Bart also pioneered our global health practice. He has advised pharmaceutical clients on seasonal and pandemic influenza since 2016. Since then, this practice area expanded to cover all matters relating to infectious diseases, and as of 2020, emergency preparedness and response (eg. WHO prequalification, International Coordination Group negotiations, Emergency Use Listing, International Health Regulations Rev 2024). He has been the pharmaceutical industry’s lead lawyer advising on the WHO Pandemic Treaty negotiations, adopted on 14 May 2025. Currently, he continues to advise on the work of the Intergovernmental Working Group (“IGWG”) teasing out the technical details of the “Pathogen Access and Benefit-Sharing System” intended to create legally binding obligations on companies to commit vaccines, therapeutics and diagnostics in case of a new global health emergency.

In Chambers rankings, clients have kindly described Bart as “very knowledgeable, action-focused and service-focused lawyer”, adding that he “really tries to find a way of working through challenges”, am “customer-oriented” and provide “sound advice and reasonable options for our business with pros and cons.”

Finally, Bart has an active pro bono practice assisting NGOs defending the human rights of persons with a disability through strategic litigation before the EU Court.

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