Bacta Letter Calls for Machine Games Duty to Remain at 20%

Bacta — the trade body representing the amusements and low-stake, low prize gambling entertainment industry in Great Britain — has sent a letter with 120 signatories to UK Chancellor John Healey, calling for machine games duty (MGD) to not be increased in the Autumn Budget, which will be announced today (Wednesday).

According to The Times, Healey is likely to announce an increase in MGD from 20% of net takings to 25%. This would be significantly less than the rise to 40% which was recommended in June by cross-party think tank the Social Markets Foundation (SMF). The SMF wants a tax rate to encompass all Category B machines, arguing the government needs to raise revenue, and more harmful gambling should result in higher tax.

The SMF’s basis for this is that, according to the Gambling Survey for Great Britain covering 2023, one in four (27%) casino game users on machines gambles at risky or harmful levels. Any potential change will be announced by Healey in the Budget, which will be confirmed at 12:30pm on Wednesday.

Bacta & co’s argument

Ahead of the announcement, Bacta’s letter, signed by a total of 120 independent, family-run businesses from across the amusement, bingo and leisure industries, alongside the manufacturers and suppliers that support them, argues any potential increase will result in the losses of thousands of jobs.

According to Bacta and its co-signatories, many of these redundancies will occur in areas of high unemployment and will decimate the infrastructure of high streets, particularly in coastal communities, where many amusement venues are situated. The coalition of independents are requesting for the rate to be kept at 20%.

The signatories also argue a rise in MGD would put them in a legislative trap, with caps on stakes and prizes meaning operators cannot raise prices to offset the increase. The letter states:

“These are not just businesses on a corporate balance sheet. They represent our families’ life’s work, and the memories of millions of people who have walked through our doors.”

Not a new industry issue

The UK gambling industry has already had to contend with tax increases which were announced in last year’s Autumn Budget. From the start of April this year, remote gaming duty, paid on online casino bets, was raised from 21% of gross gambling yield (GGY) to 40%.

Meanwhile, general betting duty, paid on online sports bets, will go up from 15% of GGY to 25% in April 2027; bets on horseracing will be exempt from the increase.

Joseph Cullis, President of Bacta, added:

“An increase in machine games duty would put jobs, livelihoods and the future of longstanding family businesses at serious risk. For some, it could be the final straw.

“We recognise the difficult decisions facing the Treasury, but we urge the Chancellor to consider the real-world consequences of such an increase. Once these businesses close, the jobs, investment and contribution they make to their communities will be extremely difficult to replace.”

Industry trade body the Betting & Gaming Council has claimed that according to EY modelling, a rise in MGD to 40% could cost up to 16,000 jobs, close nearly 1,500 betting shops and 34 casinos, and leave the Treasury up to £124 million worse off.

The BGC mentioned how more than 600 betting shops have already closed since the last Autumn Budget was announced, with more than 10,000 jobs either being lost or put at risk.