UK Government Considers Doubling Machine Games Duty

Reports indicate that Chancellor John Healey is considering a proposal to double Machine Games Duty (MGD) as part of the forthcoming Autumn Budget. If enacted, the tax increase would see the lower rate on gaming machines rise from 5% to 10%, the standard rate from 20% to 40%, and the higher rate from 25% to 50%.

The potential tax hike is being explored as a method to generate funds for increased defence spending and to help alleviate the cost-of-living crisis. The move has received support from figures such as former Prime Minister Gordon Brown, who has publicly called for the duty to be raised to finance relief for rising domestic fuel costs this winter.

Industry warns of closures and job losses

The UK’s gambling industry trade body, the Betting and Gaming Council (BGC), has voiced strong opposition to the plan.

Doubling tax on a land-based product would lead to more closures, further job losses and damage to the wider ecosystem that supports British racing.

This warning is supported by analysis from industry experts, who have told the Racing Post that a doubling of MGD could precipitate the closure of almost 3,000 betting shops. The same analysis projects a significant impact on British horse racing, with an estimated reduction of approximately £70m to the horse racing levy.

Successive tax increases hit sector

This potential MGD increase comes amid a series of recent and planned tax rises for the sector. In last year’s Autumn Budget, Rachel Reeves announced that Remote Gaming Duty (RGD) would almost double, increasing from 21% to 40%. That change was implemented in April of this year. Furthermore, Ms Reeves declared the government’s plan to raise General Betting Duty (GBD) from 15% to 25% in April 2027.

The industry is already contending with the effects of these recent tax changes. The BGC has highlighted that by the end of 2026, more than 600 betting shops are expected to have closed and 5,000 jobs will have been lost since last year's budget. The initial financial impact has also been evident in the interim results posted by several publicly listed companies with a significant UK presence, including Entain, evoke, Flutter Entertainment, and FDJ United.

The proposal places further pressure on a land-based sector already facing significant challenges, with industry bodies warning of severe consequences for high street employment and the financial stability of British horse racing if the government proceeds with the MGD hike.