BGC Warns Government of 16,000 Job Losses if 40% MGD Rate Comes in

The Betting and Gaming Council (BGC) has warned the UK government an increase in machine games duty (MGD) to 40% of net takings could cause up to 16,000 job losses, ahead of a potential announcement in the Autumn Budget.

In June, cross-party think tank the Social Markets Foundation (SMF) called for MGD on Category B machines in the UK to be raised to 40%, which would be double the current rate of 20% of revenue generated on gaming machines in both casinos and bingo halls.

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. Recent reports have suggested UK Chancellor John Healey is giving serious consideration to implementing the proposed 40% rate, and this would be announced in the Budget on Wednesday, 28 October.

Bleak EY modelling

According to the BGC, independent modelling from EY shows raising the MGD rate to 40% could cost up to 16,000 jobs, and could cause the closure of 1,500 betting shops and 34 casinos, leading to a £124 million financial hit to the Treasury.

From the jobs potentially at risk, 80% are outside London and 27% are in the north of England, rising to almost 40% when Scotland is included.

Grainne Hurst, BGC Chief Executive, said:

“Almost one in five betting shop employees is under 25 and more than half are under 35. For many, it is their first job, their first pay packet and their first opportunity to build a career. Half the workforce are women, many balancing work with childcare and caring responsibilities. These are exactly the jobs this country needs more of, not fewer.

“The Chancellor should be under no illusion. Another tax rise would put thousands of those livelihoods on the line. Independent EY modelling shows that raising machine games duty to 40% could cost up to 16,000 jobs. That would mean fewer jobs, more empty units on struggling high streets and less money for public services. Nobody wins.”

A familiar warning

The BGC’s publishing of EY modelling echoes research it released ahead of last year’s Autumn Budget, which was announced in November. In that Budget, remote gaming duty (RGD), paid on online casino bets, was raised from 21% of gross gambling yield (GGY) to 40%; the new rate has been in place since April. In addition, general betting duty (GBD) paid on online sports bets, will go up from 15% of GGY to 25% in April 2027.

Ahead of last November’s Budget, the BGC announced EY modelling which showed more than 30,000 jobs could be impacted based on the SMF’s proposal of a 50% RGD, 25% GBD, 20% MGD and horseracing rax of 5%; bets on horseracing are exempt from next year’s GBD increase. The SMF has since changed its MGD proposal to a 40% rate.

Hurst said:

“Our message to the Chancellor is simple: rule out any increase in machine games duty, assess the damage already caused by higher taxes and halt the planned rise in general betting duty. This Budget must back Britain’s betting shops, not cost our towns thousands more jobs.”