The government of Gibraltar has issued a ministerial statement addressing the UK government’s recent decision to increase gambling duties as part of its 2025 Autumn Budget. Officials warn that any increase in gambling taxes will negatively impact the region’s revenue base and weaken fiscal projections. The government also plans to present the new Gambling Bill to Parliament. Lawmakers hope to diversify the licensing framework, allowing non-UK businesses to apply for gambling licences in Gibraltar.
Gibraltar to Face the Heat Due to the UK’s Gambling Tax Hike: Key Insights
- The UK government will increase the remote gambling duty from 21% to 40% and the online betting duty from 15% to 25%, starting in April 2026. The new tax rates will also apply to gaming companies licensed in Gibraltar.
- Gibraltar authorities fear this massive tax increase will discourage remote gambling operators from choosing a Gibraltar licence, directly impacting a critical revenue stream and eroding confidence in the jurisdiction.
- The government of Gibraltar has proposed introducing technology-friendly regulatory frameworks, leveraging AI, blockchain and digital services, and fast-tracking the new Gambling Bill to counteract the side effects of the tax hike.
Online Gambling Taxes Account for 30% of Gibraltar’s GDP
The recent increase in gambling taxes in the UK has thrown a curveball at the Gibraltar government. Authorities are nervous that this may directly or indirectly affect the island’s fiscal stability, which relies heavily on gambling taxes. The UK Revenue and Customs department has confirmed it will increase taxes on gambling from April 2026 as part of its 2025 Autumn Budget.
The Remote Gaming Duty will increase from 21% to 40%, while the General Betting Duty will rise from 15% to 25%. Gibraltar, which is a British Overseas Territory (BOT), could suffer “devastating” economic consequences as a result of the tax hike. Nigel Feetham, Gibraltar’s Minister for Justice, Trade and Industry, claims that losses could run into tens of millions.
In a ministerial statement to Parliament, dated December 1, Feetham warned that the tax hike could undo decades of work that have gone into establishing the island as a trusted authority for online gambling licensing. It would directly impact gambling revenue, which accounts for 30% of Gibraltar’s annual GDP, leading to job cuts and affecting public services.
Gambling companies licensed in Gibraltar already pay £750 million in annual gambling taxes. While raising taxes will allow the UK government to compensate for a deficit budget, it will push consumers toward black-market gaming sites, as licensed operators will pass on the additional tax burden to consumers.
Unregulated gambling operators pose a significant threat to public health. The UK Gambling Commission has recently published its first study on the thriving black market industry, outlining countermeasures. Moreover, a higher tax rate in the UK will increase the operational cost for companies and reduce the amount of corporate tax paid in Gibraltar.
Gibraltar Proposes Countermeasures to Offset Economic Impact
Minister Feetham believes that Gibraltar must update its current regulatory framework to benefit from modern technologies, such as AI, blockchain and digital services. This will help create an environment suitable for attracting high-value businesses across emerging sectors.
The government recently enforced the 2025 Gambling Bill. Lawmakers plan to introduce sections that enable businesses based outside the UK to apply for a licence in Gibraltar. Such a step will allow Gibraltar to diversify its revenue streams and find opportunities beyond the UK’s market.
Feetham explained:
We have been actively engaged in driving Gibraltar’s growth agenda in other areas. These measures include accelerating our work on technology-friendly regulatory frameworks, expanding support for AI, blockchain and digital services, and creating the conditions necessary to draw high-value businesses across emerging sectors. By focusing on innovation, skills and smart regulation, we can broaden our economic base, generate new revenue streams and secure long-term prosperity for Gibraltar at a time when other areas of our economy will be impacted by the recent UK Budget changes.
Feetham observed that these have been challenging times for Gibraltar’s regulated gambling industry. The Gibraltar Gambling Commission was finally removed from the EU’s Grey List earlier this year, following urgent reforms and months of lobbying at Brussels. However, the happiness was short-lived, as the UK gambling tax hike soon arrived, posing a significant challenge.
The minister explained that while new laws could create business opportunities in the long run, they would not compensate for the economic hit that Gibraltar faces at the moment. He also warned of the erosion of trust resulting from the tax hike, which would endanger the future of Gibraltar’s economy.
Feetham noted:
Realistically, no new economic activity can replicate that success immediately or replace the tax revenues we will lose, because these things take time. We therefore need everyone across the public sector, regulators, and bodies working together to deliver maximum value. This is not the time to talk Gibraltar down. We do so at our own economic peril. Any further erosion of confidence would only compound the challenges we face and could inflict far greater damage on our economy. It has taken decades to build the strength of our economy, but it could be damaged in a fraction of that time.