British gambling sector warns proposed rise in gaming machine tax could “put venues and jobs at risk”
An influential think tank has proposed another rise in British gambling tax, this time targeting land-based gaming machines.
UK.- The Social Market Foundation (SMF) has outlined proposals for a new tax hike on British gambling less than three months after Remote Gaming Duty was raised from 21 to 40 per cent in April. The think tank, which had been a vocal supporter of tax rises ahead of the Autumn Budget announced in November, now proposes an increase in Machine Games Duty (MGD) on Category B slot machines.
The Autumn Budget also contained a rise in general betting duty on online sports wagers from 15 to 25 per cent set to come into force in April 2027. However, the land-based gambling sector emerged unscathed from the tax assault, with no changes to the tax rate on bets placed at high street betting shops, including gaming machines in betting shops. Horse racing bets were made entirely exempt from the rate increase, and the 10 per cent tax on bingo was scrapped entirely.
The SMF now suggests that the MGD rate on Category B slot machines should be increased to 40 per cent. That would bring them level with the new tax rate on online slots.
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.
The SMF’s proposal would keep the MGD rate on Category C machines, typically found in pubs, at 20 per cent and that on lower-stake devices at 5 per cent. It argues that this would shift the tax burden to riskier EGMs while protecting the hospitality industry.
According to the think tank, the proposed measure could generate betweenn £275m and £458m a year in extra tax revenue. It also cited polling by Survation of 2,047 adults, which found that 43 per cent supported higher taxation on these machines compared with 11 per cent who favoured cuts.
It also stated that Category B machines are disproportionately located in deprived areas, with 47 per cent of the UK’s 1,400 adult gaming centres situated in the bottom 20 per cent of neighbourhoods in terms of wealth.
Gideon Salutin, the SMF’s Chief Economist, said: “Our modelling shows that raising Machine Games Duty is one of the few tax rises that would actually improve the public finances twice over – once through higher receipts from the machines themselves, and again as spending shifts to sectors that generate more jobs and more tax revenue per pound.
“The way we’ve set it out ensures that tax is raised only on the most harmful type of slot machines, while insulating the hospitality industry entirely. The public clearly understands this. When a plurality of supporters of every national political party back a tax rise on these machines, it’s a mandate for reform that shouldn’t be ignored by the Chancellor. Especially given that the Chancellor has already established that taxes should be raised in line with associated harms in the previous Budget.”
Industry response to new gaming machine tax threat
The Betting and Gaming Council (BGC), the industry trade body, has been quick to criticise the proposal.
It said in a statement: “We fundamentally disagree with any proposal for an increase in Machine Games Duty. Betting shops, bingo clubs and casinos support local jobs, help keep high streets alive and provide valued community spaces for millions of adults.
“A further increase in Machine Games Duty would put venues and jobs at risk while driving more customers towards the growing illegal gambling market. Tax policy should be evidence-led and proportionate, recognising the pressures facing businesses across the regulated betting and gaming sector.”
