90 MPs call for Machine Games Duty rise in UK Autumn Budget
Pressure on MGD is growing in the Labour Party with the Autumn Budget just a week away.
Key takeaways:
- Around 90 Labour MPs are urging Chancellor John Healey to raise Machine Games Duty on Category B gaming machines to 40 per cent in the Autumn Budget.
- Supporters argue the tax increase could generate between £275 and £458m annually.
- Gambling industry groups warn higher tax could threaten betting shops, bingo venues and gaming halls, with some operators predicting venue closures and job losses if the increase goes ahead.
UK.- With just over a week to go until John Healey makes the UK government’s Autumn Budget announcement, pressure is mounting for the Chancellor of the Exchequer to include a Machine Games Duty (MGD) rise for Category B gaming machines. In a pattern that echoes last year’s announcements of hikes for Remote Gaming Duty and General Betting Duty, some 90 Labour MPs are now backing the proposal, which former prime minister Gordon Brown is also supporting.
The campaign is being led by Halesowen Alex Ballinger. In a letter to the chancellor, Ballinger urged the government to increase MGD on Category B machines to 40 per cent as proposed in June by the Social Market Foundation (SMF), one of the think tanks that also proposed last year’s gambling tax rises.
Category B devices, which can pay out up to £500, are the most common type of electronic gaming machine in UK betting shops, arcades and bingo halls. They are currently subject to a MGD of just 5 per cent on stakes up to 20p, 20 per cent on stakes up to £5, and 25 per cent on stakes above £5.
Ballinger pointed to the SMF’s report, which estimated that a higher MGD rate could generate between £275m and £458m in annual tax revenue. He also argues that adult gaming centres are disproportionately concentrated in deprived communities. He claims that “47 per cent are located in the most deprived fifth of the country, while the most deprived local authorities have more than six times as many per head as the least deprived”.
He added: “In a review of Category B3 machines, the Government noted evidence from the Gambling Commission that players of high-stake, high-prize machines are among the groups most likely to contact gambling help services, that those with gambling problems play gaming machines more frequently than those with fewer problems, and that problem gamblers spend relatively more time and money on machines.”
Ballinger also argues that pub fruit machines should be exempt from any MGD increase, with the higher rate applying only to Category B machines. He also stressed what he described as “bingo’s important social and community role”, noting that the game would remain free of duty under the proposal.
He said: “This targeted Labour reform would protect communities from harm, require fair contributions from the broadest shoulders, and back high streets creating opportunity and retaining wealth. Pubs would pay no more, bingo games would stay duty-free and lower-category machines would remain protected.”
However, industry representatives, including The Bingo Association’s chief executive Nicole Garrett has warned that a rise in MGD could put venues at risk. Although bingo games themselves would remain exempt, bingo operators continue to rely heavily on machine revenues. Groups in other verticals have also expressed concern, with the gaming hall association Bacta and the Betting and Gaming Council both lobbying against the proposed tax hike. The latter is running a campaign dubbed Back Our Betting Shops.
Betfred founder Fred Done has claimed that doubling MGD would lead to the disappearance of high-street bookmakers by 2030, while Rank Group says it might be forced to close a third of its venues. More than 1,000 members of the greyhound racing sector have also signed a letter opposing potential increases.
FAQs
What is Machine Games Duty?
MGD is a tax charged on profits generated by land-based gaming machines in Britain, such as fruit machines and roulette terminals. On Category B machines, operators currently pay the duty at a tiered rate of just 5 per cent on stakes up to 20p, 20 per cent on stakes up to £5, and 25 per cent on stakes above £5. Category C machines, typically found in pubs, pay MGD at 20 per cent and lower-stake devices at 5 per cent.
What Machine Games Duty rise is proposed?
It’s been reported that the government is considering a scenario in which MGD on Category B slot machines would double, with the lower rate rising from 5 to 10 per cent, the standard rate from 20 to 40 per cent and the higher rate from 25 to 50 per cent. The rate for Category C machines would not change.
What are Category B slot machines?
Category B devices can pay out up to £500. They are the most common type of electronic gaming machine in UK betting shops, arcades and bingo halls and offer higher winnings than Category C machines, which are typically found in pubs.
