The planned UK increase in Remote Gaming Duty (RGD) from 21% to 40% by 2026 — and a rise in online betting duty from 15% to 25% by 2027 — is not a routine revenue tweak. For Gibraltar, where online gambling makes up roughly 30% of GDP and directly employs about 3,400 people, the change creates immediate operational trade-offs: shrink UK-facing products, raise consumer prices, or move activity to more favourable jurisdictions.
Why Gibraltar’s iGaming base is especially vulnerable
Gibraltar’s economy is unusually concentrated: large remote-gaming companies such as bet365 and BetVictor run substantial UK-facing operations from the territory, and the tax is being applied to gross revenue rather than profit. That distinction matters because, as Gibraltar’s Gaming Commissioner Andrew Lyman warned publicly, a 40% RGD plus other levies can push the effective tax burden on certain products toward 80–100%, leaving little room for normal operating margins.
Minister Nigel Feetham has repeatedly pointed out that the UK decision removes policy choice from Gibraltar’s hands. The territory asked for phased implementation or differentiated treatment and was refused; that refusal, combined with the 2026 and 2027 deadlines, compresses time for firms to alter their commercial models or for regulators to design compensating measures.
How operators are already responding and what that means in practice
Operators are adjusting on several fronts now: cutting marketing spend and consumer incentives, lowering return-to-player (RTP) rates, automating customer service and risk teams, and prioritising non-UK markets. Some are accelerating relocation of functions or licences to EU hubs such as Malta. The draft Gibraltar Gambling Bill 2025 aims to regulate the full value chain and could make the territory more attractive to businesses pivoting away from UK revenue, but such legislative changes take time to translate into new investment.
| Item | Status / Timeline | Likely operator action | Immediate risk signal |
|---|---|---|---|
| Remote Gaming Duty (RGD) | 21% → 40% by 2026 | Reduce UK product exposure; cut bonuses; raise prices | Rapid fall in UK customer yields |
| Online betting duty | 15% → 25% by 2027 | Shift marketing to non-UK markets; consider licence moves | Outbound staff moves or licence filings in EU states |
| Effective tax on certain products | Estimated 80–100% for some offerings | Product withdrawal or complete exit from UK-facing inventory | Announcements of product rationalisation or layoffs |
Which consequences are certain and which are overstated
Certain: operators will recalibrate UK exposure in line with profitability, and some roles tied to UK-facing activities—marketing, customer support, parts of risk management—are likely to be automated or relocated. The draft also supports the evidence that regulated operators are trimming bonuses and RTP, which the Gaming Commissioner has linked to an increase in consumers seeking unregulated alternatives.
Overstated: the idea that Gibraltar’s industry will instantly collapse is a simplification. The territory is advancing the Gambling Bill 2025 to broaden regulatory reach, and a cross-border labour agreement with Spain expected in early 2026 could ease staffing constraints. Also, the UK Finance Bill’s proposed impact assessment—if it produces substantial behavioural data—could prompt policy adjustments or phased mitigation, though that outcome is not guaranteed.
Concrete checkpoints for operators and regulators
Operators should treat three trigger points as decision thresholds: (1) the passage dates in 2026–27 when new duties legally apply; (2) any UK Finance Bill impact assessment findings that materially revise expected UK demand elasticities; and (3) signs of sustained migration of players to unregulated sites (customer churn plus evidence of offshore sign-ups). If an operator’s product-level effective tax rate nears 60%, it should have a documented exit or reform plan for that product.
Regulators in Gibraltar and the UK should track a different set of checkpoints: filings for EU licences by Gibraltar firms, formal requests for phased implementation or relief, and the impact assessment published as part of the Finance Bill. Gibraltar’s government can use the Gambling Bill 2025 to incentivise non-UK-facing activity, but new licensing advantages will only offset immediate revenue loss if they attract business within 12–18 months.
Regulator and operator Q&A
Q: When do the new rates take effect?
A: RGD increases to 40% by 2026; online betting duty rises to 25% by 2027.
Q: What is the most reliable sign firms will leave Gibraltar?
A: A wave of licence applications in Malta or other EU hubs and announcements of mass role relocations within months of the Finance Bill timetable.
Q: Can the UK reverse course?
A: Possible but unlikely without clear impact-assessment data; the Finance Bill’s assessment is the next formal checkpoint that could influence policy.
