The fractious and polarized nature of the UK gambling tax hike debate is well publicized, with the ruling Labour government’s plans supported by think-tanks and reform campaigners, in contrast to the defensive position taken by the gambling industry.
However, the multi-faceted situation can be viewed through a different lens, with Northern Ireland and Gibraltar on opposite sides of the UK gambling tax hike debate.
The Chancellor, Rachel Reeves, is currently consulting and weighing up changes to the gambling tax set-up, as part of wider fiscal measures to shore up the public purse ahead of the next budget announcement, expected on November 26.
At present, remote gaming duties (RGD) stand at 21% of gross profits from online casino and slots, while online sports betting is subject to a 15% general betting duty (GBD).
One proposal as part of the UK gambling tax hike debate was to bring equity by harmonizing taxes on gambling activities into a single remote betting and gambling duty (RBGB) at around 21%.
This would deliver an increase in funds collected for the UK Treasury, positioned as ‘Tax certainty’ by government sources, but key industry players and representative organizations blasted the hike, stating it would threaten jobs, while having no real impact on harm reduction.
The general arguments for and against tax increases on the gambling industry are partly fuelled by self-interest, but there is much more nuance in the wider debate, which will have a ripple effect throughout the UK and further afield.
Northern Ireland is a constituent country of the United Kingdom, together with England, Scotland, and Wales.
It is subject to UK laws on important matters such as tax, defense, and foreign affairs, but beyond that, Northern Ireland has its own devolved government for local matters.
Treasury Select Committee calls for higher gambling taxes despite scaremongering from the industry https://t.co/npi21XJiOT
— Matt Zarb-Cousin (@mattzarb) November 7, 2025
Northern Ireland calls for more punitive taxes on harmful gambling
In the Northern Ireland Assembly, the All-Party Group (APG) on Reducing Harm Related to Gambling has railed against proposals for harmonization, but crucially, not against a tax increase.
The APG is led by Philip McGuigan MLA, who has publicly spoken of his own struggles with gambling harm that cost him more than £100,000 ($130,810).
In an open letter to UK Chancellor Rachel Reeves, the APG has warned that “harmonisation would effectively incentivise gambling companies to drive customers from less harmful products such as sports betting and horseracing towards highly addictive online casino and slot games.”
The APG has written to the Chancellor to express concern at plans to harmonise tax rates for various forms of online gambling, and has backed calls for significant tax rate increases on the most harmful ‘remote gaming’ products (online slots & casinos). https://t.co/1vxdgGowWN
— Reducing Harm Related to Gambling APG (@GamHarmAPG) November 5, 2025
It takes the position that gambling harm would be exacerbated by equalizing tax across the spectrum, from the less addictive sports betting to more harmful online activity such as instant slots.
The APG would like to see a different approach, by aggressively raising RGD to 50% and a hike in GBD to 25%.
While this would have massive consequences for the gambling industry, the APG points to a £2 billion ($2.6 billion) uplift that could make a material difference in addressing gambling harm, protecting young people, and compensating for advertising bans.
The Northern Ireland representatives have accused Westminster of prioritizing revenues from the gambling industry over meaningful change and protections for at-risk users.
The APG further outlined the critical local situation as outdated legislation means remote gambling has no legal basis in Northern Ireland at present, with the province having the highest rate of problem gambling in the UK.
As a result, gamblers are not able to avail of the same regulatory protections as users in Great Britain (rUK).
APG chair Philip McGuigan added, “Remote gambling, and in particular online gaming and slots, is causing untold harm to individuals, families, and communities here. It is unacceptable that these highly addictive products could be taxed at the same rate as less harmful gambling activities, like betting on horse racing.
“The statistic that we have the highest rate of problem gambling is deeply concerning and urgent action is needed.
“We are calling on the British Chancellor to reject these proposals to harmonise tax and instead use the upcoming Budget to increase taxes on the remote gambling industry. This would protect people, reduce harm, and raise much-needed funds for public services.”
Conversely, Gibraltar takes a contrasting stance, driven by protectionism of its own economic interests.
‘The Rock’ is a British Overseas Territory situated on the southern tip of Spain.
It is a self-governing entity, but the people of Gibraltar have continued to vote in referendums to remain subject to British sovereignty, making it an effective British outpost in Spain.
The Spanish government continues to claim sovereignty over Gibraltar, but relations are largely cordial between the respective nations.
A warning from the high street: @WilliamHill, @Betfred, @PaddyPower and @EntainGroup all say higher gambling taxes could shut shops, drain local economies, and reduce funding for UK racing.https://t.co/dBg6M8HcFI pic.twitter.com/3lqWn09h5L
— Betting and Gaming Council (@BetGameCouncil) October 30, 2025
Gibraltar’s protectionist stance driven by economic security and stability
Driven by tax and VAT incentives, Gibraltar is a major hub for online gambling operators that serve the UK, and in return, more than 80% of Gibraltar’s economy is directly linked to the gambling industry.
No wonder there is increasing unease at the prospect of harsh hikes to gambling taxes, which would have ramifications beyond the UK mainland.
Andrew Lyman, the Gambling Commissioner for Gibraltar who also serves as Non-Executive Director of the Independent Betting Adjudication Service (IBAS), recently made a rare public commentary on the UK gambling tax hike debate, warning of the dire consequences for the British and Gibraltar economies if the tax hikes materialize.
Usually indifferent to the wider political picture, Lyman wrote on LinkedIn that “the idea that the industry can absorb significant top-line tax rises and not suffer wider structural impact and loss of bottom-line profit is disingenuous.”
Regulator warns that rising UK betting taxes could lead to industry-wide structural impacts, job losses, and reduced profits. Credit: LinkedIn
He conceded that an increase of up to 5% in RGD could be absorbed, but anything significantly greater, at around 30% could lead to “irrecoverable damage to the sector.”
His comments were echoed by Gibraltar Finance Minister Nigel Feetham who warned that: “even a modest increase could drain up to £160 million annually from Gibraltar’s tax revenues, as operators might relocate or reduce UK-facing operations.”
The Gibraltar position is clearly influenced by self-interest and economic stability, but it is interesting to note that it puts its own affairs ahead of revenue-generating matters for the UK, despite the close relationship between the entities.
Feetham’s warning has been highlighted this week after it was revealed by ITV that Sky Bet has migrated important business functions to Malta to avoid around £55 million ($71.9 million) in taxes annually.
The Flutter Entertainment-owned company has been subject to a report from Tax Policy Associates on what has happened, why Skybet has moved to Malta, and how HMRC (UK tax authority) could react.
What next on the gambling tax hike proposals ahead of the UK budget?
The latest indications are that the UK government will not go for the harmonization approach, and instead, will adopt a two-tier system for sports betting, with horse racing exempt, with higher taxes placed on online gambling compared to wagers staked in physical betting premises.
It has been mooted that Chancellor Reeves will opt to retain the 15% GBD on sports betting in bricks-and-mortar venues, while online bets will be subject to a modest increase.
RGD from online casino and slots betting is expected to be increased, but at this stage, there is no indication of how far the Labour government will go.
Their position could even change, as it has done on other policies, ahead of November 26.
The UK betting industry has warned of dire consequences, including Betfred stating all of its retail shops could be forced to close as a result of the tax increases, while the Betting and Gaming Council warned 40,000 jobs could be jeopardized.
The divergent positions taken by Northern Ireland and Gibraltar on tax increases reflect the sheer difficulty of striking a balance in the overall UK gambling tax hike debate.
Users and at-risk players need to be protected, but the reality of job retention and the threat of losing betting operators to more favorable tax jurisdictions cannot be ignored.
There is a lot of grey in what is definitely not a black and white issue, but Chancellor Reeves and the Labour government must find a way of placating competing interests for the greater good of the UK economy while alleviating gambling harm.
Image credit: Canva / UK Parliament / Chris McAndrew / CC BY 3.0
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