Gibraltar evaluates 'Plan B' as UK gambling tax increases
The Government of Gibraltar raised alarms following the confirmation of the tax increase included in the United Kingdom’s Autumn Budget. The Minister of Justice, Commerce and Industry, Nigel Feetham KC, warned the local Parliament that the territory will have to “do things differently” to face the direct and indirect effects that the new British tax scheme will have on its public finances.
A blow to a key sector in Gibraltar
Feetham recalled that Gibraltar had established itself for decades as “an international center of excellence for betting and online gaming,” supported by a benchmark regulatory framework since the 1990s. However, the tax increase announced by the United Kingdom will directly impact the corporate tax reform work that the Gibraltar government has developed over the past two years.
The Chancellor Rachel Reeves’ Budget raises the Remote Gaming Duty from 21 to 40 percent for online casino games starting April 2026 and increases the general betting tax from 15 to 25 percent from April 2027.
Many operators with corporate bases in Gibraltar pay taxes in the United Kingdom under the point of consumption principle, which is why they already contribute around 750 million pounds annually to the British Treasury. Feetham emphasized that these taxes “are calculated on revenues, not on profits,” which results in much higher effective rates. Recent models in the United Kingdom project that the total burden on some companies could range between 80 and 100 percent of their profits.
Fiscal and labor risks
The minister stressed that the revenues generated by the gaming industry are essential to finance key services in Gibraltar, including health, education, and a significant part of the public budget. The final impact, he explained, will depend on whether operators can absorb the British tax increase without passing it on to job cuts. A reduction in staff would directly affect tax collection from payroll taxes (PAYE).
A “Plan B” for Gibraltar’s economy?
Feetham stated that Gibraltar spent months warning British authorities about the consequences of the tax change, but now that the measure is confirmed, it is time to broaden the strategic vision. In this regard, he pointed out that the new criteria of the Gibraltar Gambling Bill seek to safeguard the sector’s future, although the territory will need to diversify its economy.
“There has been talk of the need for a ‘Plan B,’” he acknowledged. “Replacing an industry the size of gaming is not something that can be achieved overnight, especially after adjusting for Brexit, the pandemic, and the cost-of-living crisis. But we must adapt and seize new opportunities as they arise.”
Among the areas of expansion mentioned are the development of regulatory frameworks favorable to technology, the promotion of digital services, blockchain and artificial intelligence, and attracting high value-added companies.
According to Feetham, “betting on innovation, training, and smart regulation will allow us to broaden the economic base, generate new revenues, and ensure long-term prosperity in a context where the British budget will affect key sectors of Gibraltar.”
If you wish, I can also prepare an analysis of the potential impact on operators based in Gibraltar or a comparative chart of gaming taxes in Europe.
Tags: United Kingdom, UK, Gibraltar, UK online gambling taxes