The upcoming increase in Machine Gaming Duty (MGD), set for April 2027, has raised alarms about potential job losses and the adverse effect on the horseracing sector, which could face a £57 million annual deficit. Despite this, major operators in the market appeared relieved after Chancellor John Healey confirmed that the MGD would not double as initially feared.
Steve Grech, CEO for Europe at Trust Payments, expressed relief over the government’s decision, highlighting that while the 25% duty still imposes considerable strain on operators with slim margins, the additional time until implementation allows businesses to adjust their strategies. He warned, however, that the increase might push tax revenues toward unregulated online platforms. "It’s still a significant increase for operators with tight margins,” Grech noted. “The worry is that tax will migrate to responsible, regulated online offerings."
In the wake of this announcement, share prices for operators like Entain and Rank Group rose approximately 7%, signaling investor optimism for the industry's adaptability.
The Betting and Gaming Council (BGC) criticized the MGD rise as "deeply damaging." CEO Grainne Hurst referenced independent modeling by EY, which predicts nearly 9,000 job losses and jeopardizes around 1,000 betting shops and casinos. Hurst cautioned that the closure of these establishments could have broader implications for communities, potentially benefiting illegal gambling markets. She stated, "This decision is a blow to thousands of workers, businesses and communities who rely on Britain’s regulated betting and gaming industry."
Entain, a major retail operator in the UK, expressed disappointment as the increased tax is projected to cost the company around £25 million annually across its UK and Ireland operations. CEO Stella David had previously warned Prime Minister Andy Burnham about the potential for MGD to double and noted that operational cost projections for retail sectors have decreased by £75 million annually with the latest tax rate. David emphasized that these tax changes could displace consumers into the unregulated gambling sector, stating, "These additional tax changes will further compound damage and push more people into the growing illegal market."
On a related note, Nicole Garrett, CEO of the Bingo Association, highlighted the impact of the MGD rise on future investments in bingo clubs. "Bingo clubs cannot invest for the future when every Budget brings a fresh tax threat… 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," Garrett remarked. She reminded that the government had recently scrapped Bingo Duty in April, only to roll back support shortly thereafter, jeopardizing hundreds of jobs.
Mark Renshaw, CEO of Spotlight Sports Group, underscored the consequences for the horseracing industry, noting that over 600 betting shops have closed since the last budget, leading to an estimated £17 million decline in levy and media rights funding for the sport. Renshaw reiterated the interdependence of betting and horse racing, suggesting that both sectors must remain viable together. "Horseracing and betting depend on each other like nowhere else in sport, which is why the whole ecosystem needs to be sustainable," he stated.
Meanwhile, the British Horseracing Authority (BHA) has also voiced its concerns regarding the MGD increase. CEO Brant Dunshea pointed out that the horseracing industry relies on high-street betting for nearly a third of its £350 million annual income, meaning that the tax increase could diminish revenues by up to £57 million annually. He warned that this shortfall may affect prize money, racecourse operations, jobs, and essential horse welfare initiatives. "This change could prove devastating for the future of our sport," Dunshea said, adding that the BHA intends to work with the government to mitigate the tax impact.
Contrarily, the All-Party Parliamentary Group (APPG) on Gambling Reform welcomed the MGD increase alongside the removal of business rates relief for adult gaming centers, arguing for higher taxes on products associated with greater social harm. APPG co-chair, Alex Ballinger MP, recently advocated for raising MGD, stating, "Having consistently called for fairer taxation of the gambling industry, we are pleased to see the government accept again that higher harm products should be taxed at a higher rate. ",
