Below follows the Minister Nigel Feetham's statement to Parliament regarding the impact of the UK Autumn Budget 2025 On Gibraltar: 

Madam Speaker, I rise to make this Ministerial Statement in order to update this House and our  country following the decision by the United Kingdom Chancellor of the Exchequer to significantly  increase gambling taxes. This is an issue of vital importance to Gibraltar and one that may directly  and indirectly affect our public revenues. It is precisely for this reason, Madam Speaker, that over  recent months we have spent a substantial amount of time and effort lobbying in the United  Kingdom and setting out clearly to His Majesty’s Treasury the potential local consequences of such  a decision. 

Gibraltar has been an international centre of excellence for online betting and gaming for decades,  ever since the development of our gold standard regulatory framework for the sector in the 1990s.  Our sector is well-regulated and world-leading. Our businesses are dual-regulated in Gibraltar and  the UK and they pay taxes in both Gibraltar and the UK. This sector is a Gibraltarian success story  of which we should be proud. 

Today, the online betting and gaming sector is a vital pillar of our economy: it accounts for  approximately 30% of our GDP, employs more than 3,400 people, and generates around one-third  of our tax receipts, through a combination of corporate income tax, personal income tax, social  insurance and local gambling duties. 

In the UK budget (on 26 November) remote gaming duty, a tax on online casino games, poker, and  bingo was increased from 21% to 40% effective from April 2026, making it among the highest rates  in the world. 

In addition, the tax on online betting was increased from 15% to 25% effective April 2027. 

Taxes on UK retail gambling (betting shops, bingo halls, casinos and gaming arcades) were not  raised; with retail bingo duty being abolished altogether. 

There had been speculation that there would be an increase in UK retail machines games duty (20- 25%), but that was not done, and all tax rises have been loaded onto the UK-facing online gambling  industry.

Tax rates on gambling on British horse-racing remained at 15%. 

Madam Speaker, gambling taxes are a top line tax charged on revenue and should not be confused  with bottom line profit. So effective tax rates (all taxes as a proportion of profit) are much higher.  Even before these changes, it was estimated that this stood at 60-65%. 

Modelling by some in the UK now suggests the effective tax rate on these businesses will increase  to between 80-100%. 

Tax is charged on a point of consumption basis so legitimate UK-facing firms such as those based in  Gibraltar (as opposed to the UK-facing black market) are already paying UK gambling taxes. In  Gibraltar, firms already pay £750 million of gambling taxes annually to the UK Exchequer 

Madam Speaker, it also goes without saying that this development impacts the vital work we have  undertaken over the past two years on corporate tax reform, which we have referred to as  Gibraltar’s ‘National Tax Strategy’, a strategy I have explained on many occasions inside and outside  this House. That work had delivered significant progress and had already been reflected in the  record tax revenues announced at our last Budget in July this year, an important pillar of this  Government’s tax policy. The tax revenue generated helps to fund our public services, health care  and education, and to strengthen our public finances - without increasing the burden on ordinary  working people. This announcement, unfortunately, could put us back to where we were before  then. 

The level of corporate tax and PAYE revenue at risk in Gibraltar will depend on the extent to which  local operators are able to mitigate the increased gambling tax costs. Raising tax in the UK imposes  higher costs on Gibraltar gaming businesses and reduces the amount ultimately paid in corporate  tax in Gibraltar. If part of that mitigation involves reducing jobs, this would, in turn, have a direct  impact on PAYE receipts. 

I am grateful to the UK Exchequer Secretary, Dan Tomlinson MP, for the time that he and his  officials have taken to meet me on a number of occasions in recent months, and to the many other  UK parliamentarians - too numerous to name - who have done the same. 

I must also say, Madam Speaker, that I could not be prouder of the officials from both the Ministry,  Gambling Division and the Tax Office who have worked alongside me in recent months. They know  how challenging this has been to me personally. No matter how robustly or persuasively our and  the industry’s arguments were put, it became increasingly clear that there was strong support, both  within the UK Government and among influential voices outside it, for raising gambling taxes  significantly, with some (including the Treasury Select Committee) even calling for increases above  50 per cent! 

We presented every argument, highlighting the economic impact on the UK and not just Gibraltar,  including effects on the black market and the Laffer Curve. In discussions with the UK Treasury, we  sought differentiated treatment for Gibraltar and the wider British family. When this was not  accepted, we advocated for any necessary tax changes to remain manageable, with Gibraltar  sharing in the adjustment and for any further tax increases to be phased in. While challenging and 

still resulting in an annual corporate tax shortfall for Gibraltar, the proposed level was at least one  we could attempt to mitigate elsewhere, though this, too, was ultimately not accepted. 

I am also grateful to the local gaming industry and to the Gibraltar Betting and Gaming Association,  as well as the UK Betting and Gaming Council, particularly Stephen Hodgson and Grainne Hurst,  for the advice they have provided throughout this period. It has certainly not been easy. We  sounded the alarm in the UK to anyone who cared to listen. Early on, some even accused us of  scaremongering, because no one expected the outcome of the Budget to be as it ultimately was. The  market consensus had been that any increase in online gambling taxation would not exceed 30%,  which many believed to be the upper limit of what the sector could reasonably absorb. In the final  weeks before the Budget, I personally feared a worse outcome because it became clear that for a  significant number of 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 £1 billion 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. 

It is against this incredibly challenging political backdrop that I and others have worked so hard.  Some may ask whether the time spent lobbying in the UK has been wasted. My answer is clear:  regardless of the outcome, we can be proud of the work we have done in engaging with the UK  Government, and of the relationships we have built, strengthened, and newly established along the  way. 

Madam Speaker, the pace at which we have had to confront challenges facing Gibraltar has been  relentless. We spent months lobbying in Brussels to secure Gibraltar’s removal from the EU grey  list, and no sooner had we succeeded, this tax challenge in the United Kingdom emerged. 

Others locally have spoken about the need for a ‘Plan B’. But let us be clear: replacing an industry  as significant to our economy as gaming cannot happen overnight, particularly after we have  already had to recalibrate our economic model following Brexit, endure the impacts of COVID, and  navigate the subsequent cost-of-living crisis. Yet adjust we must, and that means doing things  differently and seizing new opportunities for Gibraltar as they arise. But there is no way of sugar coating this. 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. 

We have been actively engaged in driving Gibraltar’s growth agenda in other areas. Far from  remaining still, the Government has worked in close partnership with the Gibraltar Regulatory  Authority (GRA) and the Financial Services Commission (FSC) to advance a series of policy  initiatives aimed at strengthening our financial sector. The recent appointment of new GRA Board  members signalled a renewed focus on innovation and modernisation. Earlier this year, we  convened a Finance Summit to bring industry, regulator (FSC) and Government together to map  out future opportunities. Since then, our dialogue with the FSC has intensified around practical  measures to support growth, increase competitiveness and attract new investment.

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. 

I also remind this House that we have already secured its unanimous support for legislation  enabling the Government to issue Directions to the FSC in the macroeconomic interests of  Gibraltar. That underscores our commitment to act decisively, when necessary, to protect jobs,  maintain competitiveness, and promote sustainable growth. 

Madam Speaker, we expect to bring the new Gambling Bill to this House, and I believe it enjoys  cross-party support. In recent months, as part of exploring viable alternatives, I have been in  discussion with the Gambling Commissioner on how best to grow non-UK business, both to  diversify our exposure and to open new markets for Gibraltar. On Friday, I instructed the Gambling  Commissioner to accelerate this work so that Gibraltar can move swiftly to capture opportunities  beyond the UK and strengthen the long-term resilience of our gaming sector. 

Madam Speaker, throughout my 31-year professional career I was deeply involved in developing  Gibraltar’s growth sectors. These took years to build and required persistent hard work, and I know  what that process entails. Brexit was also a major challenge to our financial sectors and I was heavily  involved in restructuring that followed. But, 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, and we must focus as much on spending efficiencies as on growth. We  cannot ignore that this affects everyone and that every citizen has a role to play. 

Finally, Madam Speaker, 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. 

I am obliged, Madam Speaker.