The UK government has raised Machine Games Duty (MGD) to 25%, increasing the tax burden on businesses operating gaming machines in land-based gambling venues. The change comes amid wider debate over gambling taxation, the financial sustainability of betting shops and the potential consequences of higher operating costs for Britain’s high streets.
The increase follows months of industry debate over how far the government should raise taxes on gaming machines. The standard MGD rate had been 20%, while gambling reform campaigners and some political figures had called for a more substantial increase to 40%.
The decision to set the rate at 25% represents a five-percentage-point increase rather than the doubling proposed by campaigners. Nevertheless, it adds to the financial pressure on operators already adapting to significant changes in the taxation of online gambling.
Gambling Industry Warns of Pressure on Betting Shops
The proposed tax increases had prompted strong opposition from gambling operators and industry representatives. The Betting and Gaming Council (BGC) warned that higher taxation could accelerate betting shop closures, reduce employment and discourage investment in the retail gambling sector.
Several major operators have argued that additional taxes could undermine the financial viability of venues that already face rising employment, energy and property costs. Industry representatives have also questioned whether substantially higher rates would generate the expected tax revenue if businesses respond by closing locations or reducing operations.
Entain, Flutter UK and Ireland, bet365, Bally’s Corporation, Evoke and Betfred were among the companies whose executives had urged the government to reconsider further tax increases ahead of the Autumn Budget.
The debate has also involved bingo operators, adult gaming centres and businesses connected to British horse racing and greyhound racing. These sectors have highlighted the potential knock-on effects of betting shop closures, including reduced employment and lower commercial contributions to racing.
Wider Gambling Tax Changes
The MGD increase comes after Remote Gaming Duty rose from 21% to 40% in April 2026. General Betting Duty on online betting, excluding horse racing, is also scheduled to increase from 15% to 25% in April 2027.
These changes have prompted operators to review costs and business structures. Flutter Entertainment, for example, announced plans to cut up to 1,400 jobs in October, citing the impact of increased gambling taxation.
The latest MGD decision adds another element to the UK’s changing gambling tax framework. Land-based operators must now account for the higher rate as they assess the financial performance of gaming machines and retail venues.
The move also marks a compromise between the previous 20% rate and proposals to increase the duty to 40%. Its longer-term effects on betting shops, employment and government revenue will depend on how operators adjust to the additional cost.
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