UK chancellor John Healey raised machine games duty by 5 percentage points on Wednesday, well below the 40% rate the industry had spent the summer bracing for. The relief is thin. Operators and their advisers say the duty lands on top of a run of recent tax and regulatory changes, and that the cumulative weight is what matters.
Remote gaming duty went from 21% to 40% in last year's budget, announced by then-chancellor Rachel Reeves, and a new general betting duty for remote betting arrives next year at 25%, up from 15%. Dan Waugh, partner at advisory firm Regulus, puts the increase in plain terms: 'If your income tax went up by a quarter overnight, you wouldn't see that as a positive.' He expects more venue closures and job losses, and warns that constant fiscal change makes the UK look unreliable to investors.
Bethan Lloyd, partner at Wiggin, says the industry is already squeezed and a 5% rise on squashed margins is not ideal. She points to the risk for horse racing, where many punters still bet in shops rather than online, and expects consolidation and cost-cutting to continue. Larger diversified groups such as Flutter and Entain are better placed to absorb the extra cost; smaller retailers and retail-only operators carry more risk.
Ismail Vali, president of Gaming Compliance International, calls the rise part of a 'perfect storm' pushing consumers toward the illicit market. He cites the unregulated share of UK online GGR rising from 0.43% in 2020 to an estimated 9% by the end of 2025, and warns: 'We are knocking on the door of 10% illegal black market share.' As licensed operators trim marketing budgets, he says, players meet brands offering better odds or welcoming bonuses and cannot tell whether those brands hold a licence. Offshore plug-and-play sites with startup costs put at £25,000 make the shift easier. Vali argues only stronger enforcement and coordination between regulators, platforms, payment providers and advertising channels will curb it.
Waugh reads Healey's tone as a signal of more to come. Banks were handed an extra 3% on banking surcharges alongside a note of gratitude for the role they play; gambling got no such line. 'We'll be back here in a year's time,' he said.
