Gambling Industry Could Be Hit with Another Tax Rise on Machine Games Duty

^{Chancellor John Healey may dip into the gambling industry’s coffers this October by increasing Machine Games Duty. (Image: John Healey/Facebook)}

By Daniel Smyth

Chancellor John Healey is reportedly targeting slot machines ahead of his autumn budget, sparking rumours of another tax rise for the industry.

Talks of a potential tax hike were sparked by an article in The Times. Citing unnamed sources close to Healey, the newspaper claims that Machine Games Duty (MGD) could increase in October. 

Chancellor tight-lipped but rumours swirl

Healey has been fielding questions in recent days as talks of October’s budget begin to swirl. Although he’s refused to comment directly on tax rises, the Chancellor acknowledges changes are necessary to tackle economic priorities, including the cost of living crisis. 

The Times article doesn’t put a definite figure on the potential tax increase, but any rise in MGD could hurt the industry. Current MGD rates are 5%, 20% and 25%, depending on the gaming machine, stakes and maximum payout.

The Social Market Foundation recommends doubling MGD on Category B machines from 20% to 40%. According to its research, this could generate up to £458 million in tax revenue.

It’s not just Category B MGD that could rise. It’s possible that tax on all three categories could double in the budget. 

Critics claim MGD rise will compound ongoing problems

Critics of the rumoured tax hike say it threatens hundreds of betting shops and, therefore, jobs across the country. Analysts at Regulus Partners believe a tax rise could force the closure of up to 4,000 betting shops and the loss of 25,000 jobs. 

Although unclear at this stage, the sombre tone is understandable. The gambling industry’s coffers have been raided multiple times over the last two years. The most impactful was the increase in Remote Gaming Duty (RGD) from 21% to 40% on April 1, 2026.

Bingo duty was abolished at the same time, but the increase in RGD has already led to several notable changes. Profit for the largest online casino, betting, and poker operators has either remained flat or dropped. Evoke, for example, saw H1 adjusted EBITDA drop 10%. 

Lower profits have forced betting shop closures and a drop in share price not only for Evoke but also for other operators, including Entain. The increase in RGD follows three years’ worth of freezes on Gaming Duty bands, something the Betting and Gaming Council has described as a stealth tax. 

Labour sentiment swings towards tax hike

Despite tighter margins, there’s an appetite among those with government links to extract more revenue from the gambling industry. Former Prime Minister and Chancellor Gordon Brown told the BBC’s Today show in August that he supports a rise in MGD.

Although he’s no longer in government, the long-time Labour member said he would “support” a “machine gaming tax” in an effort to raise £500m from adult gaming centres “without affecting bingo halls or pubs.”

Brown's comments follow a letter signed by 101 Labour MPs calling for a broader gambling tax package. The letter is based on recommendations made by the Institute for Public Policy Research (IPPR), which include increasing MGD for cash-prize slots from 20% to 50%. 

Gambling industry braced for change

The budget, as always, will remain a point of speculation until it's announced on October 28. However, the current sentiment among gambling insiders, including those at Casinos.com HQ, is that the industry’s coffers may be subject to another tax raid this autumn.