From shop closures and redundancies to black market growth, the UK government was warned of the perils of hiking Machine Games Duty (MGD) in their Autumn Budget.
Some anti-gambling campaigners, including former Labour leader Gordon Brown, had called for MGD to be doubled from 20% to 40% in a move that would have decimated the industry.
The Chancellor, John Healey, instead opted for a 5% hike on the tax paid on the machines, which are the lifeblood of high street betting shops and other venues, such as casinos, bingo halls and Adult Gaming Centres.
But the mood was not one of relief, as even that increase is likely to cause shop closures, redundancies and industry upheaval – the move has been described by one City AM source as a ‘job killer’.
Meanwhile, key industry players have begun to put a number on the turmoil, with Entain and the Rank Group expecting a hit to revenues of £25 million and £9 million a year respectively.
And the damage filters through to other stakeholders too, with the British Horseracing Authority (BHA) bracing itself for an annual loss to the sport’s funding of a staggering £57 million.
Detrimental Impact
The 5% increase in MGD will start to be collected in April 2027, coinciding with the rollout of the 10% hike in General Betting Duty.
And that, of course, follows the 19% rise in Remote Games Duty (RGD), which operators have been paying since April of this year.
All three of those tax hikes have come from Autumn Budgets decided by successive Labour governments, whose anti-gambling stance has not gone down well within the industry.
But the main priority now is to mitigate the loss in revenue and attempt to salvage as many betting shops and retail premises as possible – something that senior officials are struggling to pull off.
Entain chief executive Stella David published a statement in which she warned of the ‘detrimental impact on the wider industry, UK high streets, jobs and livelihoods’, confirming the additional annual cost of £25 million to the company prior to mitigation efforts.
“We will continue to work hard to limit the impact of these changes on our business, our people, and the communities in which we operate. Our priority is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets,” David said.
She added that Entain hoped to fully mitigate the new tax regime by the end of 2028, with ‘estate rationalisation’ – betting shop closures, in layman’s terms – seemingly inevitable.
Eyes Down
Meanwhile, the Rank Group – which operates Grosvenor Casino and Mecca Bingo – has confirmed that the impact of the MGD rise will go deeper than just betting shops.
They are anticipating a hit of £9 million a year, with the profitability of a number of their venues affected by the increased taxation. Although no confirmation has been given, Rank officials have confirmed that plans for mitigation will be revealed in January’s mid-year reporting… but casino and bingo hall closures are a distinct possibility.
The CEO of the Bingo Association, Nicole Garrett, slammed the government for their unwillingness to protect a sector that dates back decades.
“Bingo clubs cannot invest for the future when every Budget brings a fresh tax threat,” she warned.
“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.”
Horse Racing in Peril
Although you might not think a rise in tax paid on gaming machines would have an impact on horse racing, the sport is an unwitting victim of the government’s regime.
Around 600 betting shops have already closed since the Autumn Budget of 2025. That means a reduction in betting levy payments, plus a downturn in income from selling media rights to each shop individually.
Brant Dunshea, head of the British Horseracing Authority (BHA), estimates that the closures have already cost the sport £17 million; that’s vital funding for prize money, employment and essential horse welfare programmes.
With more tax heaped upon operators, the situation is likely to get exponentially worse, with market analysis suggesting that horse racing could lose out on £57 million should the anticipated betting shop closures be forced.
Racing is the only sport that truly leans on the betting industry, with around £120 million paid into its coffers via bookmaker contributions.
Reflecting on the new rate, Dunshea said:
“While the MGD rate increase is not as severe as some called for, this change could still prove devastating for the future of our sport.”
The BHA now plans to ‘engage with the government to establish how we can work together to reduce impacts of this tax policy.’