The rise in Machine Gaming Duty (MGD), due to take effect in April 2027, has prompted warnings of job losses, betting-shop closures and a potential £57 million annual hit to horseracing.
The market however, seemingly breathed a sigh of relief with major operators seeing share price rises after it was confirmed that Chancellor John Healey would not be doubling MGD as first feared.
Market relief?
Steve Grech, CEO-EU of Trust Payments, welcomed the clarity of the Government’s position and the avoidance of a feared 40% duty, but underlined that the 25% rate still represents a significant burden for operators with narrow margins.
Grech highlighted the deferral of implementation until April 2027 as an opportunity for businesses to adjust pricing strategies, machine assortments and investment plans, while warning about possible tax migration to online platforms.
“It’s still a significant increase for operators with tight margins. With the new rate starting in April 2027, businesses have a window to review pricing, machine mix and investment plans”
“The worry is that tax will migrate to responsible, regulated online offerings.”
According to Grech, market responses in the immediate aftermath saw share prices of key operators such as Entain and Rank Group rise by approximately 7%, reflecting investor relief and anticipation of sector adaptation.
Detrimental effect on high streets and jobs says Entain
The Betting and Gaming Council (BGC) condemned the increase as “deeply damaging.”
Grainne Hurst, BGC chief executive, cited independent EY modelling forecasting nearly 9,000 job losses and the closure or severe risk to approximately 1,000 betting shops and casinos.
Hurst warned that shuttered venues could hollow out high streets and inadvertently strengthen illegal gambling operators.
“This decision is a blow to thousands of workers, businesses and communities who rely on Britain’s regulated betting and gaming industry,” Hurst said.
Major operators echoed these concerns. Entain, a prominent UK retail operator, expressed disappointment with the decision, estimating an annual cost of around £25 million for its UK and Ireland retail operations.
David first expressed her concern of a MGD rise in an open letter to Prime Minister Andy Burnham when the rise was predicted to double. Predictions of operational expenses for retail have dropped by £75 million annually with the new tax increase.
CEO Stella David warned of detrimental effects on jobs, high streets and the wider industry, emphasising the risk of pushing consumers towards unregulated illegal gambling markets.
“These additional tax changes will further compound damage and push more people into the growing illegal market,” David stated.
Nonetheless, Entain signalled confidence in managing the impact through estate rationalisation and operational optimisation.
BingNO
Bingo Association CEO Nicole Garrett returns the conversation to the impact of the rise on investing.
“Bingo clubs cannot invest for the future when every Budget brings a fresh tax threat….this tax raid undermines the Government’s own pledge to deliver growth in every postcode, with clubs in the Midlands and the North facing the hardest hit.”
Garrett emphasised that the government had “scrapped Bingo Duty and promised to back British bingo” in April of this year.
“Just six months later, it has clawed most of that support back and put hundreds of jobs at risk.”
Neigh or yay?
Mark Renshaw, CEO of Spotlight Sports Group, publisher of the Racing Post, highlighted the ripple effects on horseracing, reminding that over 600 betting shops have closed or announced closures since the last Budget.
This, according to Renshaw, has resulted in an estimated £17 million loss in levy and media rights payments to the sport.
Renshaw stressed the role of industry solutions in assisting shops to remain viable through engaging horseracing content.
“Horseracing and betting depend on each other like nowhere else in sport, which is why the whole ecosystem needs to be sustainable, not one part of it,” Renshaw added
The British Horseracing Authority (BHA) issued a stark warning on the potential impact of the increased MGD.
BHA Chief Executive Brant Dunshea noted that since horseracing derives nearly one-third of its £350 million annual funding from high-street betting contributions, the tax rise could depress revenues by up to £57 million annually.
This is down 38% from previous estimates made by Regulus if the duty was doubled.
Dunshea cautioned that this shortfall threatens prize money levels, the operation of racecourses, employment, and critical horse welfare initiatives.
“This change could prove devastating for the future of our sport,” Dunshea said.
The CEO also emphasised that horseracing is the only sport “in receipt of a statutory levy from the betting industry”. Dunshea made it clear that the authority intended “to engage with the Government to establish how we can work together to reduce impacts of this tax policy”.
APPG welcomed rise
By some, however, the rise was embraced.
The All-Party Parliamentary Group (APPG) on Gambling Reform welcomed both the MGD hike and the removal of business rates relief for adult gaming centres, advocating for higher taxes on products associated with greater social harm. The APPG has long campaigned for stricter tax restrictions, with co-chair Alex Ballinger MP leading the charge for a MGD doubling only last week.
“Having consistently called for fairer taxation of the gambling industry and measures to prevent gambling harm, we are pleased to see the government accept again that higher harm products should be taxed at a higher rate and take steps to deal with the social harms caused by Adult Gaming Centres”.
Kathryn Evans
Kathryn covers bitesize breaking news with a primary focus on EMEA and US legislation. A proud North Walian, fluent Welsh speaker and lifelong Wrexham FC fan – long before Hollywood came calling.