Shares in Entain, Rank Group and evoke all rise as increase in MGD is not as bad as some feared but may still lead to job losses and further betting shop and casino closures
UK Chancellor of the Exchequer John Healey has increased Machine Games Duty (MGD) by five percentage points to 25 per cent.
In his first Budget delivered earlier today, UK Chancellor John Healey confirmed that MGD will increase from its current rate of 20 per cent, rising to 25 per cent from 1 April 2027.
“This will increase the rate on higher-risk machines, which are more associated with gambling harm and commonly found in venues such as adult gaming centres,” said the Government. “The revenue raised from this measure will help to pay for the freeze in business rates for retail, hospitality and leisure properties, so that no property in those sectors faces a real-terms increase.
“In order to protect pubs and seaside arcades, the government is maintaining the existing rate for lower-stake machines.”
The Government will also change the liability for MGD to machine suppliers for supplier-owned machines under profit sharing arrangements from 1 April 2028, and has launched a 12-week consultation on the implementation of this reform. The consultation will close on 20 January 2027.
The MGD increase and change in duty liability to the machine supplier is expected to generate additional taxes of £135 million in 2027/28, rising to £150 million in 2028/29.
UK betting and gaming industry body, the Betting and Gaming Council (BGC), expressed “deep disappointment and concern” at the Chancellor’s decision to raise MGD to 25 per cent.
“This is 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,” said BGC CEO Grainne Hurst. “The Chancellor has ignored repeated warnings about the consequences. At 25 per cent, EY projects almost 9,000 people could lose their jobs and almost 1,000 betting shops and casinos could close or be at serious risk. These are real people and families facing the loss of their income and security, in places where alternative work can be hard to find.
“For Britain’s casinos, the consequences will be significant. These are major employers and important contributors to local economies, yet this decision will force otherwise viable businesses to close and undermine investment before it can be delivered.”
Grainne said that every betting shop or casino closure means “lost livelihoods, more empty premises and another huge blow to our high streets.”
“These venues will not simply be replaced, particularly in places already struggling to attract jobs and investment,” she continued. “Higher taxes on the regulated industry also will make the illegal gambling market more attractive to customers, where operators pay no UK tax, contribute nothing to British sport and offer none of the safeguards required of licensed businesses.
“We already contribute £6.8 billion to the British economy, generate more than £4 billion in tax and support 109,000 jobs. Yet the Government has chosen a course that will destroy jobs, close businesses and diminish the industry’s contribution to the economy.
“The Chancellor has chosen a tax rise that will cost British jobs, close businesses and hollow out high streets, while handing an advantage to illegal operators. The Government cannot ignore the consequences of this decision.”
In last year’s Budget, online gaming duty in the UK rose to 40 per cent from April 2026, while general betting duty is due to rise to 25 per cent in April 2027.
Since then, more than 600 betting shops have closed or announced closure, while over 11,000 jobs across the online and retail sectors have been lost or put at risk, according to the BGC.
The tax rise will also put further pressure on the industry’s support for British sport, including annual contributions of around £350 million to horseracing and more than £40 million to the English Football League and Scottish football, alongside support for rugby league, darts and snooker.
Brant Dunshea, chief executive of the British Horseracing Authority, confirmed the expected hit to racing finances.
“While the Government has rejected a worst-case scenario to increase Machine Games Duty to 40 per cent, in raising the rate to 25 per cent it will nevertheless cause significant damage to racing’s finances,” he said. “There is now a clear risk that this decision will lead to the closure of hundreds, if not thousands, of betting shops across the country.
“British racing – which derives nearly a third of its £350 million annual income from betting via high street shops – is now set to potentially lose £57m a year, based on the independent modelling that was shared with the Treasury ahead of today’s Budget.
“While the MGD rate increase is not as severe as some called for, this change could still prove devastating for the future of our sport – impacting prize money, the viability of racecourses, thousands of jobs; and vital horse welfare projects and research.”
The Bingo Association said that after the Government abolished Bingo Duty in April to help clubs invest and survive – a move which was worth around £22 million a year to the sector – the new 25 per cent MGD rate reverses around £13 million of that every year.
The Association’s modelling, shared with the Government before the Budget, showed the number of loss-making clubs rising to 77. It said that operators had committed £50 million of investment in clubs this year, outside London and the South East, which will now be cut back sharply. This will lead to closures, with bingo clubs in the Midlands and the North likely to be hit hardest.
Nicole Garrett, chief executive of the Bingo Association, said: “Bingo clubs cannot invest for the future when every Budget brings a fresh tax threat. In April, the Government scrapped Bingo Duty and promised to back British bingo. Just six months later, it has clawed most of that support back and put hundreds of jobs at risk. Clubs cannot build a future on promises that last six months. This tax raid undermines the Government’s own pledge to deliver growth in every postcode, with clubs in the Midlands and the North facing the hardest hit.”
Today’s Budget also included measures “to put beyond doubt” the tax treatment of freeplays, prizes and tournaments for Remote Gaming Duty (RGD). This will amend the RGD legislation applying to freeplays (now to be known as restricted plays), prizes and tournaments. It will set out how restricted plays won from the use of another restricted play are excluded for the purposes of RGD calculations.
The measure will also amend the legislation determining when participation in a tournament is treated as playing a game of chance. In addition, it will revise the definition of a prize, including the treatment of prizes awarded under the rules of a game and certain payments made following the interruption or termination of a game. The changes will take effect from 1 April 2027.
The government also confirmed that it will freeze the gross gaming yield bandings used to determine the rate of Gaming Duty from 1 April 2027 to 31 March 2028.
Shares in Entain plc (LSE:ENT) were trading 4.68 per cent higher at 473.90 pence per share following the news, while shares in Rank Group plc (LSE:RNK) rose 8.75 per cent to 85.80p, and shares in evoke plc’s (LSE:EVOK) climbed 3.77 per cent to 44.62p