Betting and Gaming Council Opposes SMF’s 40% MGD Recommendation

The Betting and Gaming Council (BGC) has publicly opposed the Social Market Foundation’s (SMF) recommendation for machine games duty (MGD) to be raised to 40% of net takings, arguing the venue closures and job losses this would cause have not been quantified.

In a report released earlier this week, the SMF specifically focused on Category B machines when calling for an MGD increase. The SMF wants a tax rate to encompass all Category B machines, arguing the government needs to raise revenue, and that more harmful types of gambling should lead to higher rates of tax.

The SMF’s basis for this is that one in four (27%) casino game users on machines gambles at risky or harmful levels - the highest of any major category – and that 17% of fruit and slot machine users class as risky, compared to the gambling average of 4.5%. Those numbers were outlined in the Gambling Survey for Great Britain, published by regulator the Gambling Commission and covering data from 2023.

How this would differ

In the current system, the duty operators pay on gaming machines varies dependent on the cost of play. For dutiable machine games with a maximum cost of play of 20p and a maximum prize of £10, the tax rate in the 2026/27 year is set at 5%.

The rate goes up to 20% for machines which are not Type 1 machines but where the cost to play cannot exceed £5. When the cost of play can exceed £5, the rate goes up to 25%.

In response to the report, the BGC, which represents more than 90% of betting shops, online betting, gaming operators, bingo halls and casinos in the UK, said the report relies on technical assumptions and that many of its members would be affected, as well as working men's clubs and miners' welfare clubs.

BGC’s stance

The BGC argues there are significant differences in the types of venues that offer gaming machines, including levels of supervision, staffing, age verification, customer demographics and consumer protections. The BGC also said the report did not distinguish between taxation by machine category and taxation by venue, and that different regulatory controls are in place for the different types of venues.

Grainne Hurst, BGC Chief Executive, said:

“We fundamentally oppose any increase in MGD, and nothing in this report justifies such a damaging policy. The regulated betting and gaming sector supports around 109,000 jobs, contributes billions to the UK economy and provides valued leisure venues for the millions of adults who enjoy betting safely and responsibly.

"Doubling MGD would not protect those communities. It would force venue closures, cost jobs and weaken high streets, while benefiting only the growing illegal gambling market, which pays no tax, contributes nothing to local communities and offers none of the consumer protections found in the regulated sector.”

Lack of quantification

According to the SMF’s modelling, the harms associated with machine gaming has led to economic losses worth £2.33 billion, including fiscal costs worth £669 million through welfare, housing, crime and health payments. The SMF estimates raising the MGD rate to 40% could increase revenue for the government between £275 million and £458 million.

Hurst questioned this however, stating:

“Remarkably, the report makes no attempt to quantify the venue closures or job losses its own proposals would cause. Tax policy should be evidence-led, proportionate and based on a full assessment of its impact on jobs, investment, consumers and communities."