UK Chancellor John Healey announced an increase in Machine Games Duty (MGD) in the government’s 2026 Budget, raising the rate from 20% to 25% on certain gaming machines.
The tax applies to net takings from some slot machines, including Category B machines found in betting shops and adult gaming centres. The increase is expected to affect gambling companies such as Entain, which owns Ladbrokes, and Evoke, the owner of William Hill UK and 888.
Healey said the measure would help fund business-rate relief for high-street businesses, while protecting pubs and seaside arcades. The government has not announced that all gambling products or operators will face the same tax increase.
Machine Games Duty Rises by Five Percentage Points
The Budget raises the MGD rate on the affected machines from 20% to 25%. The change is a five-percentage-point increase, rather than a 25% increase in the tax rate.
MGD is charged on the net takings from specified gaming machines. The higher rate will add to costs for businesses that rely on those machines, including some betting shops and adult gaming centres.
Healey said the measure was designed to support high-street businesses through changes to business rates. The Budget also increases the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000.
Gambling Industry Had Warned of Job Losses
Before the Budget, gambling companies and industry representatives warned that further tax increases could put pressure on employment and retail locations, following changes announced in the previous year’s Budget.
The Betting and Gaming Council commissioned analysis that estimated doubling Machine Games Duty could lead to as many as 1,470 betting shop closures and 15,900 job losses across the sector. Those figures were estimates associated with a more substantial tax increase than the one announced by Healey.
The final Budget measure raises the rate to 25%, rather than doubling it. Its actual impact on operators and employment will depend on their exposure to the affected machines and any steps they take to manage the additional cost.
Operators Face Higher Costs
The tax increase will affect companies with significant land-based gambling operations, including Entain and Evoke. The extent of the impact will vary according to each company’s gaming-machine revenue and the proportion of its business covered by the duty.
The change adds to a period of tax adjustments for the UK gambling sector. However, the MGD increase applies to specified gaming machines and should not be confused with separate duties on remote gaming or general betting.
The Budget’s final provisions and implementation timetable will determine when operators must begin paying the higher rate.
Source: https://www.reuters.com/world/uk/uks-healey-increases-taxes-gambling-companies-budget-2026-10-28/
