EXCLUSIVE: You may very well ask, where in the world are Ceuta and Melilla? And why should we care?
The answer is, just across the Mediterranean, on the sun-kissed coast of Morocco; but still, by a quirk of Spanish colonial fate, part of the European Union.
And this is why we should all care:
The two Spanish enclaves in Morocco are now positioning themselves as emerging iGaming centres, attracting dozens of operators with tax incentives that significantly outcompete Malta and Gibraltar.
And these boosts–while the UK, for example, hikes its iGaming levies–include a 50 percent reduction in Spain’s gambling tax, as well as major cuts to corporate tax, social security contributions and income tax.
Technical professionals are being recruited to strengthen local technology capabilities and establish a digital hub to support betting operators building their platforms.
Legacy of Empire
The enclaves–a legacy of Spain’s short-lived North African colonial empire, that included a large chunk of modern-day Morocco (from 1912-1956) and former Spanish Sahara (from 1884-1976), now known as Western Sahara–have increasingly turned to iGaming and online gambling as core economic drivers out of necessity.
Their traditional economic model—heavily reliant on cross-border trade with Morocco—collapsed in 2018 when the Moroccan government closed the commercial borders.
In response, the Spanish government has introduced one of Europe’s most attractive tax regimes for iGaming in Ceuta and Melilla.
This includes a 10 percent gambling tax on GGR (half the mainland rate), a 50 percent reduction in corporate tax, sharply reduced point-of-consumption taxes for online gambling, a 50 percent reduction in employer social security contributions to support hiring, and special tax deductions for tech companies employing local staff.
VAT, furthermore, does not apply in Melilla or Ceuta, and online gaming operators pay only 0.5 percent IPSI tax instead of the standard four percent.
This package was deliberately designed to attract online betting, casino, sportsbook, payments and cybersecurity firms – sectors that can operate remotely and provide high-paying digital roles.
Whales Ashore
Many Spanish and international brands have now shifted licensing and operational bases to the enclaves for these incentives.
“This boom took off in 2018 when Melilla and Ceuta began to enjoy tax advantages,” said Fernando Morán, a gambling expert working for a casino in Melilla. “Every other day I hear that some casino has opened up here.”
By 2023, Ceuta hosted 38 licensed gaming companies, including major players such as Flutter, Betway, Playtech, Casino Barcelona (Grupo Peralada) and 888 Online Games España, which reported €1.44 billion in turnover.
Betting operators are among the top seven companies in the territory by revenue, and brands such as Betway and 888 have moved operations from Malta and Gibraltar to Ceuta.
By the same year, Melilla had a cluster of 23 gaming companies, according to the local online gaming association AJOM.
The group includes Spanish gaming multinational Codere Online, Jokerbet (Grupo Veramatic), Luckia, Kirolbet and Casino Gran Madrid Online.
Glitnor Group, the online gambling company that operates from Sweden, Malta, Gibraltar, Bulgaria, and Spain, announced it will open a base in Melilla and has begun recruiting staff.
Spanish gaming operator El Dorado has also confirmed it will establish operations in Melilla to launch a new online division.
Destination
El Dorado CEO Raúl Rubio said Melilla offers a strategic platform for the company’s digital internationalisation and praised the specialised digital training programs available in the enclave.
The Spanish territory is investing in digital infrastructure and technological innovation to support companies starting up in the enclave and attract staff with technical expertise.
“Melilla has consolidated itself as an increasingly relevant destination for online gaming companies,” Esther Azancot, head of Melilla’s economic activation department, told iGamingFuture.
“The city now accounts for 14 percent of all Spain’s operating licences — a highly significant volume that continues to grow and which demonstrates the strong orientation of the local economy toward this technology-driven activity.”
Online gaming has become one of the pillars of Melilla’s new economic model and its most dynamic sources of highly skilled employment for the arriving auxiliary technology companies.
In just seven years iGaming has grown to account for 4.5 percent of Melilla’s GDP.
Digital Hub
“Melilla is already functioning as a fully operational digital hub. The cluster of technology companies and online operators based here has created a solid, rapidly expanding business ecosystem that enjoys a unique tax framework in Spain,” affirmed Azancot, adding that Melilla offers increasing connectivity, strengthened by improved fibre-optic capacity and new data centres.
By 2023, iGaming accounted for roughly eight percent of Ceuta’s GDP, with sector turnover of around €7.5 billion (£6.56m).
By early this year, the online gaming sector had become the leading private employment driver in both enclaves, especially for young, bilingual workers with mid-level digital skills.
Ceuta and Melilla have small local economies, limited land and historically narrow economic bases.
For years they relied on cross-border commerce with Morocco, public-sector employment, the Spanish military and low-margin retail and tourism.
Blockade Powers Boom
When Morocco closed the commercial borders in 2018, the cities needed new industries.
Manufacturing was not viable due to geographic isolation, prompting a shift towards digital sectors such as iGaming, sports betting and fintech – industries that require office space, fibre connectivity and skilled workers within an EU-regulated jurisdiction.
iGaming offers rapid scalability, immediate tax revenue and skilled job creation. It attracts CRM teams, fraud and compliance specialists, technical support staff, software developers, payments providers, AI vendors and game studios.
Crucially, Ceuta and Melilla provide full EU regulatory transparency under Spanish and EU gambling laws, without the grey-area licensing or tax uncertainties sometimes associated with Malta or Gibraltar.
Only companies genuinely established locally—meaning at least 50 percent of staff and wage expenditure are based in the enclaves—can access the reduced 10 percent GGR tax. Similarly, local presence is required to obtain the 50 percent corporate tax rebate (from 25 percent to 12.5 percent), which falls further to 7.5 percent for new companies in their first two years.
Coming
No VAT is charged in Melilla or Ceuta, and IPSI applies at just 0.5 percent for gaming-related services such as advertising, data processing, electronic services and consultancy.
Both enclaves offer a 50 percent discount on employer social security contributions and attractive income tax incentives, including deductions of up to 60 percent. Melilla even advertises rebates of up to 100 percent for certain relocated professionals in gaming and technology – further reducing the cost of basing tech, risk, CRM and compliance teams locally.
As a result, several operators are now moving real headcount to the territories.
The growing digital sector is strengthening economic resilience in both enclaves, reducing reliance on subsidies, lowering unemployment and reinforcing Spanish identity in territories contested by Morocco.
Watch out Malta and Gibraltar: Ceuta and Melilla are coming for your iGaming business.
