Published on: September 1, 2022, 12:23 p.m.
Last updated: September 1, 2022, 01:01.
For years, Malta and Gibraltar have been the go-to places for any gambling company looking for a friendly place to set up shop. However, Ceuta, an autonomous city in Spain, has been busy lately and continues to attract more of the market.
Ceuta may belong to Spain, but it has significant autonomous control over its activities. Since 2011, it has attracted gambling companies through financial incentives and tax breaks to become a major gambling hub.
Even on a foggy day, it is possible to see Gibraltar from Ceuta. That proximity may have been one of the reasons some gambling companies made the jump.
Ceuta bets on games
The overall economy of Ceuta has recently been down for a few years, but is on the rebound. Moreover, it is improved enough that it has stabilized the deterioration of its credit risk over the past year. However, more remains to be done.
The local government reports that 22% of companies in the city are at high risk of default. Before COVID-19, the level was 13%. Last year, 23% of companies were exposed to high risk.
In the first half of 2022, Ceuta did not see any bankruptcy filed. Last year, there was one. The creation of new companies increased by 3%, while the dissolution of companies decreased by 7%.
There are now over 34 gambling companies with offices in Ceuta. These include Flutter Entertainment, 888 Holdings, Juegos España and Playtech, according to iGaming Ceuta.
Ceuta has an economy based on services. About 33% of the region’s companies are concentrated in the commercial sector, which accounts for 16% of the city’s economic activity. The city’s industrial sector (3% of companies) has a minimal economic share in the region, providing 1% of turnover.
The construction and real estate sectors have a significant share, representing 21% of the total. However, their impact on the economy is significantly lower, as they represent only 5% of turnover. Business services, which comprise 11% of companies, represent only 2% of turnover.
This is where the gambling industry in Ceuta proves itself. In a new government update, 68% of Ceuta’s economic turnover comes from just 3% of total commercial activity. This segment is gambling and betting.
Looking to get more attention
In 2011, Ceuta hosted 26 offices for gambling companies. This declined slightly over the next few years, dropping to 21 in 2017 and 2018. Things picked up in 2019, with a significant jump to 34 in 2020.
Besides the companies mentioned above, Codere, Luckia and others have moved to the city because of its incentives. There are corporate and gambling tax rebates and no VAT charges. In place of the latter is a tax on production, services and imports, which barely registers at 0.5%.
There are also discounts for employees of gambling companies. Personal income tax, for example, offers a 60% discount.
At the height of Gibraltar’s glory days as a gaming hub, the industry produced 40% of its gross domestic product. Now Ceuta captures a significant part of that and continues to grow.
The most recent GDP data for Spain covers 2020. In that year, all municipalities and autonomous cities (Ceuta and Melilla) recorded decreases. Ceuta’s decline was lower than all the others except Extremadura.
Ceuta is not ready to dethrone Malta as the main gaming hub, which would be a difficult feat to achieve. However, they are working on it, and the numbers show that the gambling industry is building strength in the city.