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Rare-earth nitrides, such as gadolinium nitride (GdN), have great potential for spintronic devices due to their unique magnetic and electronic properties. GdN has a large magnetic moment, low coercitivity and strong spin polarization suitable for spin transistors, magnetic memories and spin-based quantum computing devices. Its large spin splitting of the optical bandgap functions as a spin-filter that offers the means for spin-polarized current injection into metals, superconductors, topological insulators, 2D layers and other novel materials. As spintronics devices require thin films, a successful implementation of GdN demands a detailed investigation of the optical and magnetic properties in very thin films. With this objective, we investigate the dependence of the direct and indirect optical bandgaps (𝐸𝑔) of half-metallic GdN, using the trilayer structure AlN(10 nm)/GdN(t)/AlN(10 nm) for GdN film thickness t in the ranging from 6 nm to 350 nm, in both paramagnetic (PM) and ferromagnetic (FM) phases. Our results show a bandgap of 1.6 eV in the PM state, while in the FM state the bandgap splits for the majority (0.8 eV) and minority (1.2 eV) spin states. As the GdN film becomes thinner the spin split magnitude increases by 60%, going from 0.290 eV to 0.460 eV. Our results point to methods for engineering GdN films for spintronic devices.