UK Chancellor John Healey is reportedly considering a major increase in Machine Games Duty as the government searches for additional revenue ahead of its Autumn Budget.
The proposal could significantly raise the tax burden on land-based gambling businesses, including betting shops, casinos and adult gaming centres. The measure is being examined as ministers look for additional funding for defence commitments and cost-of-living support, according to reporting by The Times.
Machine Games Duty is charged on the net takings generated by qualifying gaming machines. Current rates for the 2026-27 tax year stand at 5% for lower-rate machines, 20% for the standard category and 25% for machines where the maximum cost of play exceeds £5.
A doubling of those rates would take them to 10%, 40% and 50% respectively, although the government has not formally confirmed that this structure will be adopted.
Retail gambling faces another tax threat
The possibility of a higher machine levy comes only months after a major increase in taxes affecting online gambling.
Remote Gaming Duty rose from 21% to 40% on 1 April 2026 following measures announced in the previous Budget. The government has also confirmed that a new 25% rate for remote betting will take effect from April 2027, while remote bets on UK horse racing and bets placed through self-service terminals at licensed premises will remain at 15%.
Industry concerns are now shifting towards the potential impact of another tax increase on the retail sector.
Analysts cited by the Racing Post have estimated that doubling Machine Games Duty could contribute to the closure of close to 3,000 betting shops. They also warned that the resulting contraction in retail betting could reduce annual payments to British racing through the horseracing levy by around £70 million.
The potential increase has also attracted attention because gaming machines represent an important source of revenue for many betting shops and other gambling venues, particularly as operators manage higher staffing, property and regulatory costs.
Former prime minister Gordon Brown has separately called for higher gambling taxes to help fund financial support for households facing increased energy costs.
The Times reported that analysis by the Social Market Foundation estimated that raising the standard Machine Games Duty rate to 40%, while excluding pubs, could generate up to £458 million in additional revenue.
Betting industry warns of closures and job losses
The Betting and Gaming Council has strongly opposed another increase, arguing that higher taxation on land-based gambling would reduce investment and place additional pressure on betting shops, casinos and other venues.
The trade body says the UK retail betting sector is already shrinking following recent tax changes and expects more than 600 betting shops to have closed by the end of 2026 compared with the period before the previous Budget. It also estimates that around 5,000 jobs will have been lost over that period.
The BGC has repeatedly warned that increasing costs for licensed operators can also strengthen unregulated gambling businesses by making the regulated market less competitive.
Any Machine Games Duty increase would add to a broader period of fiscal change for the British gambling industry. Major operators with significant UK exposure, including Entain, evoke, Flutter Entertainment and FDJ United, have already been assessing the impact of the higher Remote Gaming Duty introduced this year.
For smaller and mid-sized operators, further increases in land-based taxation could place additional pressure on margins and accelerate consolidation across the market.
No final decision on Machine Games Duty has yet been announced. Any change would need to be confirmed by the government as part of the Autumn Budget, currently scheduled for 28 October.