Gibraltar

Located at the southernmost tip of Europe, Gibraltar has become known as an online gambling center. Gibraltar hosts as many as 20 online betting and gaming firms employing approximately 2,000 people. The gambling industry has become its largest employer and tenant. Many online gaming operators view Gibraltar as the best place to locate their operation.
Gibraltar began offering licenses to online gaming sites in 1998. Currently the country licenses sportsbooks, online casinos, and betting exchanges. Gibraltar primarily licenses operators with a proven track record and requires software testing as part of the process. There are no start-up licensing fees, but there is an annual fee of £2,000.
The tax rate for online gaming operations was 1%of turnover, with the gaming tax capped at €500,000 per year. For 2011 the tax rate was raised by a factor of 10 (to 10%) to align that industry’s taxation with the rate for other industry businesses. Businesses already registered in Gibraltar will still not pay the Value Added Tax (VAT), which should keep the overall taxation bearable.