Gibraltar evaluates gambling tax alternatives after UK increase
The Government of Gibraltar began analyzing alternative scenarios for its economic model following the confirmation of the increase in the tax burden on the gaming sector in the United Kingdom, a decision that could have significant direct and indirect impacts on the territory's public finances.
During an intervention before the local Parliament, the Minister of Justice, Commerce and Industry, Nigel Feetham KC, warned that the increase in online gaming taxes announced in the latest UK Autumn Budget represents a strategic challenge for Gibraltar, historically one of the main international iGaming hubs.
Feetham recalled that the territory has built a global reputation in the sector over decades, supported by a solid regulatory framework developed since the 1990s. However, he pointed out that the fiscal changes driven by London put recent efforts by the Gibraltar Government to reform its corporate tax system and maintain the competitiveness of the local ecosystem under strain.
The new tax scheme approved by the United Kingdom contemplates an increase in the Remote Gaming Duty for online casino gaming, which will rise from 21 to 40 percent starting April 2026, as well as an increase in the general betting tax from 15 to 25 percent from April 2027. Although many gaming companies are headquartered in Gibraltar, these taxes are applied under the point of consumption principle, meaning that revenues generated in the UK market are taxed directly in the United Kingdom.
According to official data, betting companies based in Gibraltar already contribute around £750 million annually in taxes to the UK Treasury. Feetham emphasized that these levies are applied on gross revenues and not on net profits, which considerably increases the actual tax pressure. According to previous estimates, the total effective rate was already between 60 and 65 percent on profits, and new analyses indicate that it could rise to levels close to 80 or even 100 percent after the new measures come into effect.
The minister also warned about the potential impact on employment and local revenue. If companies choose to adjust costs through staff cuts to offset the tax increase, this would directly affect PAYE income and other key taxes for Gibraltar, which fund essential services such as health, education, and general public expenditure.
A scenario that forces consideration of a “Plan B”
Feetham explained that the Government of Gibraltar held months of talks and negotiations with British authorities to warn about the consequences of the tax reform, although the changes were ultimately confirmed. In this context, he considered it essential to accelerate initiatives aimed at diversifying the economy.
While he acknowledged that replacing the weight of the gaming sector is not an immediate task, especially after the accumulated impact of Brexit, the pandemic, and the cost-of-living crisis, he maintained that the territory must begin exploring new development opportunities.
Among the lines of action mentioned, the minister highlighted the creation of favorable regulatory frameworks for technological innovation, the promotion of sectors such as artificial intelligence, blockchain, and advanced digital services, as well as attracting high value-added companies in emerging industries.
The strategy, according to Feetham, involves expanding Gibraltar’s economic base through smart regulation, investment in talent, and a commitment to innovation, with the goal of generating new sources of income and ensuring long-term financial sustainability in a scenario where the gaming business will face greater external restrictions.
The message was clear: the tax increase in the United Kingdom represents bad news for Gibraltar, but also a signal that the economic model must evolve to remain competitive in an increasingly demanding environment.
Tags: United Kingdom, Gibraltar, United Kingdom betting taxes, United Kingdom casino taxes