UK Chancellor John Healey has raised Machine Games Duty (MGD) from 20% to 25% on higher-stakes machines. He told the Commons the money will pay for support for high streets, and that pubs and seaside arcades are protected.
The 5 percentage point rise funds an increase in the small business relief threshold for retail, hospitality and leisure, from £12,000 to £18,000. Lower-stakes Category C and D machines in pubs and seaside arcades are outside the increase. Healey also excluded Adult Gaming Centres (AGCs) from business rates relief. He cited calls from MPs, singling out the member for Makerfield.
The Social Market Foundation had argued for MGD to double to 40%, the level of Remote Gaming Duty set in April, which has already driven job cuts in online gaming. Operators said before the budget that more tax pressure would mean closed venues and redundancies across the country, and that a higher MGD would raise less than promised. The 25% rate came in below the worst case, but any increase still puts venues at risk, they said. Flutter is cutting up to 16% of its UK&I headcount this month.
The Betting and Gaming Council (BGC) said it received the decision with 'deep disappointment and concern'. The body estimates 9,000 jobs could go and 1,000 venues could close. CEO Grainne Hurst said the chancellor ignored 'repeated warnings', calling it 'a deeply damaging decision and a blow to the thousands of workers, businesses and communities who depend on Britain's regulated betting and gaming industry'. Each betting shop or casino closure means lost livelihoods and empty premises, and those sites will not simply be replaced, particularly where jobs and investment are already scarce, she said. An anonymous industry source described the move as a 'punitive tax raid' and a 'jobs killer'.
Gideon Salutin, chief economist at the SMF, welcomed the rise itself, pointing to the higher harm tied to machines and to public costs in crime, healthcare and housing. He called the increase 'relatively limited' and doubted it would change industry behaviour much. Fred Done, co-owner of Betfred, had said a rate near 40% would close all of its nearly 1,300 shops. Rank Group CEO Richard Harris says any MGD increase cuts the government's overall tax take, because a venue that cannot be made to work closes over a three-to-five year period. For operators, the arithmetic now is the economics of higher-stakes rooms at 25%.
