Gibraltar Warns of Severe Impact from UK Gambling Tax Hike

Gibraltar is bracing for significant economic fallout after the UK’s decision to sharply increase gambling taxes an overhaul local officials say could destabilise one of the territory’s most important industries.

Justice, Trade and Industry Minister Nigel Feetham delivered an unusually stark warning, stating that the new tax regime represents a serious threat to Gibraltar’s fiscal stability despite months of lobbying against the changes.

“There is no way to present this positively,” he said in a ministerial address. “We pushed hard for an alternative outcome, but these measures have been imposed regardless. The impact on our wider tax strategy could undo much of the progress we have made over the past two years.”

UK Tax Hike Sends Shockwaves Through Gibraltar

Starting April 2025, the UK will almost double its remote gaming duty from 21% to 40%. Two years later, in April 2027, remote betting will fall under a new 25% general betting duty rate.

For Gibraltar where remote gambling accounts for around 30% of GDP, one-third of government revenue and provides over 3,400 jobs the consequences could be severe.

Feetham emphasised that the UK’s decision directly affects operators headquartered in Gibraltar but serving UK customers, as those firms already pay substantial point-of-consumption taxes to the UK Exchequer.

Industry Warns of Cuts as Costs Surge

The minister noted that companies are already signalling the need to offset the tax shock through cost-cutting measures:

• reduced marketing budgets

• lower promotional spend

• operational streamlining

• potential workforce reductions

He stressed that such adjustments would immediately hit Gibraltar’s corporate tax base and PAYE revenues.

Government modelling suggests that some UK-facing operators could see their effective tax rate climb to 80–100%, a level that could threaten their long-term viability.

Protecting Gibraltar’s Future

To safeguard its economy, Gibraltar is accelerating efforts to complete its upcoming gambling bill a major reform designed to modernise the 2005 Gaming Act and strengthen the regulatory framework.

According to Feetham, diversifying away from heavy UK market reliance will be essential. He has directed the Gambling Commissioner to fast-track initiatives to expand non-UK business opportunities and open new international markets for locally licensed operators.

“Our goal is resilience,” he concluded. “We must move quickly to reduce overexposure to a single market and position Gibraltar for long-term stability.”