UK gambling tax rises 'bad news' for Gibraltar
The decision to raise UK online gambling taxes is “bad news” for Gibraltar’s economy, the country’s minister for justice, trade and industry, Nigel Feetham, has said. In a ministerial statement, Feetham said that while he and others “sounded the alarm in the UK to anyone who cared to listen,” his concerns about the effect of tax rises on the growth of the unregulated market – and whether they would actually achieve their aim – were “not accepted.”
“It is bad news. We did not ask for these measures. We lobbied strongly against them. And, frankly, there was very little more that we could have done,” Feetham said.
From April next year, online gambling operators will be taxed at 40 per cent, up almost double from 21 per cent, while from April 2027, the tax rate for online sports betting operators will increase from 15 per cent to 25 per cent.
Feetham said the gambling industry is a “vital pillar” of Gibraltar’s economy, accounting for around 30 per cent of gross domestic product, employing more than 3,400 people and generating around a third of total tax receipts for the British Overseas Territory.
He said gambling companies already pay £750m in taxes to the UK Exchequer and noted that some modelling suggests such companies will soon have an effective tax rate of between 80 and 100 per cent, having been at around 60-65 per cent before the changes.
“Gambling taxes are a top line tax charged on revenue and should not be confused with bottom line profit,” Feetham added in his statement.
He said that he feared a “worse outcome,” claiming that for some Labour MPs, “this issue went beyond economics and became ideological, framed around the perceived social harm of online gambling.”
“That rationale was confirmed in writing to me by the UK Treasury immediately after the announcement, which described the measures as a proportionate way to raise £1bn for public services by targeting online gambling on the grounds that it is associated with higher levels of harm and societal costs and emphasising that the package was significantly less than many had been calling for,” he said.
“It is against this incredibly challenging political backdrop that I and others have worked so hard.”
In choosing to raise tax rates, the UK government was guided by proposals from two think tanks, the Institute for Public Policy Research and the Social Market Foundation, as well as a report from the Treasury Committee urging tax rates to go up.
In her Budget statement in the House of Commons, Chancellor Rachel Reeves introduced her section on the gambling industry by saying: “Remote gaming is associated with the highest levels of harm.”
https://www.intergameonline.com/igaming/news/uk-gambling-tax-rises-bad-news-for-gibraltar