Big Consequences
The UK Autumn Budget has sparked concern in Gibraltar. Significant increases to online gambling taxes were announced, potentially affecting the UK territory’s economy and public finances.
Minister for Justice, Trade and Industry, the Hon. Nigel Feetham KC MP, addressed Parliament today in a Ministerial Statement. He outlined the consequences of the UK Chancellor’s decision. He described the gambling tax increase as an issue of vital importance that may directly and indirectly affect the peninsula’s public revenues.
The changes, announced on November 26 and effective from April 2026, include an increase in the remote gaming duty from 21% to 40%. This is applied to online casino games, poker, and bingo
Additionally, the tax on online betting will rise from 15% to 25%, effective April 2027. Retail gambling in the UK, including betting shops, bingo halls, casinos, and gaming arcades, will not face increases. Retail bingo duty has been completely abolished.
A Major Contributor
Mr Feetham emphasised that Gibraltar’s online betting and gaming sector is a major contributor to the local economy. The sector accounts for roughly 30% of GDP, employs over 3,400 people, and generates about one-third of Gibraltar’s tax receipts. This includes corporate income tax, personal income tax, social insurance, and local gambling duties.
He noted that the effective tax rate on these businesses, already estimated at 60–65%, could rise to 80–100% following the changes in the UK. He reminded businesses that gambling taxes are a top-line tax charged on revenue and suggested they shouldn’t be confused with taxes on bottom-line profit.
He explained that Gibraltar-based companies already pay approximately £750 million annually in gambling taxes to the UK Exchequer.
The Minister also detailed efforts that he made to mitigate the impact. These include months of lobbying with His Majesty’s Treasury and engagement with UK parliamentarians. Despite these efforts, the proposed increases were upheld. The rises are partly driven by concerns over social harm associated with online gambling. Feetham said: “We sounded the alarm in the UK to anyone who cared to listen. Early on, some even accused us of scaremongering.”
Threats To Progress
Feetham believes it is obvious that these increases also threaten Gibraltar’s recent corporate tax reform initiatives. These are part of the Government’s National Tax Strategy, which led to record revenues announced in the July 2025 Budget. He warned that if businesses cut jobs in response to the new costs, it could reduce corporate tax revenue in Gibraltar and impact PAYE receipts.
In his statement, Feetham also highlighted the Government’s broader economic efforts to diversify Gibraltar’s revenue streams. These include strengthening financial services, supporting technology-driven sectors like AI, blockchain, and digital services. He also mentioned upcoming legislative efforts, including a new Gambling Bill aimed at expanding non-UK business.
The Minister recognised the contributions of Gibraltar officials, industry representatives, and UK colleagues who assisted in discussions. He confirmed he will continue to attempt to mitigate the impact of UK tax changes.
Despite the challenges, Feetham urged unity and resilience and concluded by saying: “This is not the time to talk Gibraltar down.” He went on to stress that decades of economic growth could be damaged quickly if confidence erodes.
