Chancellor Raises Machine Games Duty to 25% on Higher-Stake Machines From April 2027

^{The Treasury confirmed the Machine Games Duty increase in the Budget delivered on 28 October 2026. (Photo: Dun.can / Wikimedia Commons)}

Machine Games Duty (MGD) will rise from 20% to 25% on higher-stake gaming machines from 1 April 2027, the Government confirmed in the Budget on 28 October 2026. The higher rate will apply to machines with a maximum charge to play of more than £1 or a maximum prize of more than £100.

Betting shops, casinos and adult gaming centres will feel the change most. The Betting and Gaming Council (BGC) called it 'a deeply damaging decision' and said the sector had already absorbed a £1.7 billion tax rise last year.

What the Budget Documents Say

The increase follows months of lobbying. The BGC had questioned the evidence behind the proposed rise before the Budget, and ninety Labour MPs had asked the Chancellor for a higher rate aimed only at the most harmful machines.

The Budget document says the new rate targets 'higher-risk machines, which are more associated with gambling harm and commonly found in venues such as adult gaming centres'. Lower-stake machines keep the existing rate, which the Treasury says protects pubs and seaside arcades.

The Treasury ties the revenue to business rates. It says the money helps pay for a real-terms freeze in business rates for retail, hospitality and leisure properties. In the Budget costings, the MGD changes bring in between £135m and £150m a year once they take effect. Business rates reliefs for adult gaming centres and vape shops will also be removed from 1 April 2027.

Supplier Liability Changes Follow in 2028

A second change lands a year later. From 1 April 2028, machine suppliers will become liable for MGD on supplier-owned machines operated under profit-share arrangements. Premises operators stay liable where they own the machine outright or use it under a fixed rental or lease and control the takings. The change arrives as arcades brace for the Budget with bills already rising across the sector.

HM Revenue and Customs has opened a 12-week consultation on how the change will work. It closes on 20 January 2027 and covers implementation, not rates or stake and prize limits. The department lists pubs, clubs, family entertainment centres, arcades, bingo halls, casinos and bookmakers among the businesses likely to take an interest. The consultation page has the full questions.

Industry Warns of Job Losses

The BGC says EY projects that almost 9,000 people could lose their jobs and almost 1,000 betting shops and casinos could close or face serious risk of closure at a 25% rate. It adds that more than 600 betting shops have closed or announced closure since last year's Budget, while over 11,000 jobs across the online and retail sectors have been lost or put at risk.

'For Britain's casinos, the consequences will be significant. These are major employers and important contributors to local economies, yet this decision will force otherwise viable businesses to close and undermine investment before it can be delivered.' – Grainne Hurst, chief executive, Betting and Gaming Council

Hurst made that case in the council's response to the Budget. She also warned that higher taxes on the licensed sector make the illegal market 'more attractive to customers', and said the industry contributes £6.8 billion to the economy, more than £4 billion in tax and supports 109,000 jobs.

The BGC added that closures would be concentrated in the North of England and Scotland, and that its members give around £350 million a year to horseracing and more than £40 million to the English Football League and Scottish football. Online gaming duty already rose to 40% in April 2026, and general betting duty is due to rise to 25% in April 2027.

What to Watch

The 25% rate still needs legislation. The Government says it will bring the change forward in Finance Bill 2026-27, so the stake and prize thresholds will be debated in Parliament. The supplier liability consultation, closing on 20 January 2027, is the next fixed date for operators and machine suppliers to make their case.