Machine Games Duty in the UK Raised from 20% to 25% in Autumn Budget

Machine games duty (MGD) for Category B machines in the UK has been raised from 20% of net takings to 25%, Chancellor John Healey has announced in the Autumn Budget following months of speculation.

The new rate will apply to Category B machines in casinos, betting shops and bingo venues, and will not apply to pubs and seaside arcades. The rate is in line with the reported rate published by The Times earlier this month.

While this is another blow for UK operators, the new rate is significantly lower than the 40% rate that had been recommended by cross-party think tank the Social Markets Foundation (SMF) in June.

The SMF wanted 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 was 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.

Less damage this year

The increased taxes are not as severe as those announced in last year’s Autumn Budget, which was announced by then Chancellor Rachel Reeves last November. In that budget, Reeves confirmed remote gaming duty, paid on online casino bets, would go up from 21% of gross gambling yield (GGY) to 40%; this change came into effect in April this year.

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

The announcements have led to a number of tier one operators announcing shop closures and redundancies, including William Hill owner Evoke, Paddy Power owner Flutter Entertainment, Ladbrokes and Coral owner Entain, Betfred and Bet365.

Industry has been vocal

Following reports of the MGD rate potentially going up to 40%, a number of industry stakeholders publicly criticised the idea. In an op-ed for the Sunday Times in September, Betfred Founder Fred Done said a 40% rate would force the operator to close 495 shops; 45% of its retail estate.

Richard Harris, CEO of Grosvenor Casinos and Mecca Bingo owner Rank Group, said an increase in MGD would “make no economic sense” and would be “nonsensical”. Harris then followed this up by telling investors after publishing the group’s Q1 2026/27 financial results that “any increase to machine games duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment.”

Earlier this month, industry trade body the Betting & Gaming Council (BGC) responded to a letter sent to Healey by 90 Labour Party MPs, calling for MGD to be raised. The BGC claimed that 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.

AGCs in the firing line

The new tax will help pay for business rates relief, but adult gaming centres (AGCs) and vape shops will not be entitled to receive this support. In July, Prime Minister Andy Burnham was critical of AGCs, stating:

“Adult gaming centres on high streets can often bring real harm to communities.”