BHA Warns MGD Hike Could Cost Racing £92m a Year

^{A British horse race gets under way. (Photo: Richard Humphrey / Wikimedia Commons)}

The British Horseracing Authority has warned that doubling Machine Games Duty (MGD) in the upcoming Budget could cost the sport £92 million a year, roughly a third of its betting-derived income, after new modelling from consultancy Regulus Partners.

Regulus Partners published its analysis of a potential MGD rise on 2 October 2026, ahead of the Chancellor's Budget statement. The consultancy models the impact of doubling the duty, currently levied on the gross profits bookmakers make from gaming machines, to 40%. Under the current regime, set out in the Finance Act 2012, most betting shop machines are taxed at the standard MGD rate of 20%, with some higher-stake machines taxed at 25%.

BHA Says Thousands of Shop Closures Are at Stake

In a statement released the same day, the BHA said the Regulus modelling "issues a stark warning to the Government of the potential impact on British racing of further increasing taxes on betting in the Budget." It said racing would lose £92 million a year, a third of its income from betting, if MGD were doubled.

Greg Swift, the BHA's director of communications and corporate affairs, said in the statement: "This would have devastating consequences for British racing, hitting prize money, Levy funding and our ability to continue investing in our world-leading equine welfare and veterinary research projects."

Swift added that the scale of betting shop closures forecast by the modelling means "the Treasury risks putting thousands of people out of work while receiving almost a third less in taxation" than advocates of the policy claim it would raise.

Racing's Funding Model Leans on Betting Shops

British racing relies on betting shops for a significant share of its funding through media rights fees and the Horserace Betting Levy, which bookmakers pay on bets taken on British racing. A sharp rise in MGD risks accelerating shop closures that bookmakers have already been forecasting since the duty regime was last reviewed, which would shrink the funding base racing depends on.

The BHA said it was urging the Government "to seriously consider the secondary impact on horseracing of a tax hike on betting shops," and to "urgently explore measures to ensure that British racing – and the 85,000 jobs it supports – is put on a long-term and sustainable financial footing."

The warning adds racing to a wider lobbying effort from the retail betting sector ahead of the Budget, which has argued that further tax rises on the regulated market risk pushing custom toward unlicensed operators rather than raising the revenue the Treasury expects.

Punters backing horses through a licensed UK online casino are unaffected by how MGD is applied to machines, but the duty's level still shapes how many high street shops remain open to take a bet in person. Operators also run slot and casino game sections online where MGD does not apply, a distinction that has fuelled the industry's broader debate over how gambling taxation should be structured.