UK MGD rise triggers job loss fears despite relief over smaller hike

The lower-than-feared tax increase has eased market concerns but intensified debate over its long-term impact on retail gambling.

Key takeaways:

• The UK will increase Machine Gaming Duty by five percentage points from April 2027.
• The rise is significantly lower than the 40 per cent increase widely discussed before the Budget.
• The Betting and Gaming Council says EY modelling points to nearly 9,000 potential job losses and around 1,000 venues at risk.
• Entain estimates the change will cost its UK and Ireland retail business about £25m annually.
• The British Horseracing Authority warns the higher duty could reduce racing revenues by up to £57m a year.

UK Chancellor John Healey has confirmed a five-percentage-point increase in Machine Gaming Duty, ending months of speculation that the tax could be doubled. While gambling operators welcomed the smaller-than-expected rise, industry bodies, retail businesses and racing stakeholders warned that the measure adds to mounting tax pressures and could have significant consequences for jobs, venues and regulated gambling revenues.

UK.- Chancellor John Healey has confirmed that Machine Game Duty on Class B gaming machines, the most common class of slots at bookmakers and gaming halls in the UK will increase by five percentage points to 25 per cent as part of the UK Autumn Budget. Healey also unveiled significant business rates reforms, aligning with Prime Minister Andy Burnham’s long-standing objective of revitalising British high streets through what the government has described as a “budget of stability and economic sense”.

The MGD rise will come into force in April 2027. The five-percentage-point increase is substantially lower than the 40 per cent rise that had been widely discussed during the summer. Much of the speculation surrounding a potential 40 per cent MGD increase stemmed from a report published earlier this year by the Social Market Foundation.

The MGD hike has been presented as a measure that will allow the threshold for small business rate relief for retail, hospitality and leisure businesses to be increased from £12,000 to £18,000, while around 70,000 businesses will be removed from the system altogether. This will build on the 20 per cent reduction in business rates introduced when Burnham entered office. However, adult gaming centres will no longer qualify for any business rates relief. They have been singled out for elimination from the benefit alongside vape shops.

Industry reaction

While some industry figures expressed relief that the increase was not as severe as feared, others warned that higher taxation could still encourage customers to turn to unregulated gambling operators. Industry representatives also noted that the latest duty increase comes on top of a series of recent tax and regulatory changes affecting both retail and online gambling businesses. In last year’s Autumn Budget, then-Chancellor Rachel Reeves announced an increase in Remote Gaming Duty (RGD) from 21 to 40 per cent. A new General Betting Duty for remote betting is also scheduled to take effect next year at 25 per cent, up from 15 per cent.

The Betting and Gaming Council (BGC) described the MGD hike as “deeply damaging”. BGC chief executive Grainne Hurst pointed to independent EY modelling that forecasts nearly 9,000 job losses and suggests around 1,000 betting shops and casinos could either close or face significant financial pressure. Hurst argued that venue closures would weaken local high streets while inadvertently driving customers towards illegal operators.

“This decision is a blow to thousands of workers, businesses and communities who rely on Britain’s regulated betting and gaming industry,” Hurst said.

Major operators voiced similar concerns. Entain estimated that the tax change would cost its UK and Ireland retail business approximately £25m annually. Chief executive Stella David warned that the changes could harm employment, high streets and the wider gambling sector, while increasing the appeal of illegal gambling providers.

“These additional tax changes will further compound damage and push more people into the growing illegal market,” David stated, while Entain indicated confidence in its ability to manage the impact through estate rationalisation and operational efficiencies.

Meanwhile, Bingo Association chief executive Nicole Garrett warned that the increase could undermine investment across the sector. “Bingo clubs cannot invest for the future when every Budget brings a fresh tax threat. This tax raid undermines the Government’s own pledge to deliver growth in every postcode, with clubs in the Midlands and the North facing the hardest hit,” he said.

Garrett noted that the Government had “scrapped Bingo Duty and promised to back British bingo” in April this year. “Just six months later, it has clawed most of that support back and put hundreds of jobs at risk.”

The British Horseracing Authority (BHA) also warned of the consequences for the sport. BHA chief executive Brant Dunshea said horseracing receives nearly one-third of its annual funding, around £350m, from high-street betting contributions, and estimated that the higher MGD rate could reduce revenues by as much as £57m a year. This could affect prize money, racecourse operations, employment and horse welfare programmes, Dunshea said.

He also highlighted that horseracing is the only sport “in receipt of a statutory levy from the betting industry” and said the authority intended to engage with the government to “establish how we can work together to reduce the impacts of this tax policy”.

Meanwhile, the All-Party Parliamentary Group on Gambling Reform welcomed both the MGD increase and the removal of business rates relief for adult gaming centres. The group has long advocated higher taxes on gambling products associated with greater levels of social harm and has campaigned for stricter restrictions across the sector. Co-chair Alex Ballinger MP was among those calling for a doubling of MGD as recently as last week.

FAQs

What is changing with Machine Gaming Duty in the UK?
Machine Gaming Duty will increase by five percentage points under measures announced in the 2026 Budget. The new rate is scheduled to take effect in April 2027.

Why were gambling operators relieved by the announcement?
Many operators had feared a much larger increase after widespread discussion of a potential 40 per cent rise. The confirmed five-percentage-point increase was substantially lower than those expectations.

How could the MGD increase affect betting shops and casinos?
The Betting and Gaming Council cited EY modelling suggesting nearly 9,000 job losses and around 1,000 betting shops and casinos could face closure or significant financial pressure.

What does the British Horseracing Authority say the impact will be?
The BHA estimates the higher MGD rate could reduce horseracing revenues by up to £57m annually, potentially affecting prize money, racecourses, employment and horse welfare programmes.