Chancellor John Healey announced in the budget that the Machine Games Duty (MGD) rate will rise from 20% to 25%. The new rate takes effect on 1 April 2027.
The government said the increase will apply to high-risk machines, which are more often linked to gambling addiction and usually sit in gaming arcades. The revenue will fund a freeze on business rates for retail, hospitality and leisure. The rate for pubs and seaside amusement arcades will stay unchanged.
The market had expected a tougher move, with a doubling of the tax on the table. The Betting and Gaming Council (BGC) still called the decision 'deeply harmful'. Its chief executive, Grainne Hurst, cited EY estimates of almost 9,000 jobs lost and around 1,000 betting shops and casinos closing or under serious threat.
Entain estimated the annual cost to its retail business in the UK and Ireland at about £25 million. CEO Stella David said the changes would push people towards a growing illegal market. The company expects to absorb the burden by reviewing its estate of shops and optimising operations.
The British Horseracing Authority (BHA) estimated the potential loss to racing at £57 million a year. Its chief executive, Brant Dunshea, said almost a third of the £350 million in annual sport funding comes from street betting. The Bingo Association reminded that the government scrapped Bingo Duty in April and said most of that support is now being taken back.
A cross-party parliamentary group on gambling reform, by contrast, welcomed the MGD increase. It also backed scrapping the business rates relief for gaming arcades.
Operators have until April 2027 to rework their pricing and machine mix. The finance bill text with the details of how the rate applies has not yet been published in a form that can be analysed clause by clause.
