The impending increase in Machine Gaming Duty (MGD) set for April 2027 has led to serious concerns over potential job losses and shop closures, with estimates suggesting a £57 million annual impact on horseracing. However, the news that Chancellor John Healey won’t be doubling the MGD has brought a sense of relief to the market, resulting in share price gains for major operators.
Steve Grech, CEO-EU of Trust Payments, expressed satisfaction with the government’s decision to avoid a feared 40% duty but stressed that the new 25% rate will still heavily burden operators working with tight margins. He noted the delay until April 2027 allows businesses to adjust their pricing strategies and machine selection, while also warning of the risk of tax migration toward unregulated online platforms. Grech commented, “It’s still a significant increase for operators with tight margins. With the new rate starting in April 2027, businesses have a window to review pricing, machine mix and investment plans. The worry is that tax will migrate to responsible, regulated online offerings.”
The immediate market response saw share prices for key operators like Entain and Rank Group rise approximately 7%, signaling investor relief and optimism about the industry’s adaptation.
The Betting and Gaming Council (BGC) condemned the MGD increase as “deeply damaging.” Grainne Hurst, BGC chief executive, pointed to independent EY modeling that predicts nearly 9,000 job losses and the closure or severe risk to around 1,000 betting shops and casinos. Hurst warned that shutting down betting establishments could weaken high streets and inadvertently bolster illegal gambling operations. She said, “This decision is a blow to thousands of workers, businesses and communities who rely on Britain’s regulated betting and gaming industry.”
Entain, a prominent figure in UK retail betting, shared similar concerns. The company estimates that the annual expense for its UK and Ireland operations will reach about £25 million due to this tax increase. CEO Stella David previously expressed her worries about the MGD rise in an open letter to Prime Minister Andy Burnham, emphasizing that operational expenses, which had previously been projected to increase, are now expected to drop by £75 million annually due to the adjusted tax increase. David warned of negative impacts on jobs and businesses and highlighted the risks of pushing consumers toward unregulated markets, stating, “These additional tax changes will further compound damage and push more people into the growing illegal market.” Nonetheless, Entain remains optimistic about navigating the challenges through estate rationalization and operational optimization.
Nicole Garrett, CEO of the Bingo Association, pivoted the focus to investment concerns, stressing that rising taxes hinder future investments. “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,” she remarked. Garrett reminded that the government had recently abolished Bingo Duty and pledged support for British bingo just six months prior.
Mark Renshaw, CEO of Spotlight Sports Group which publishes the Racing Post, highlighted the cascading effects on horseracing, noting that over 600 betting shops have closed or announced impending closures since the last Budget. He reported a loss of around £17 million in levy and media rights payments to the sport, highlighting the interconnectedness of horseracing and betting. “Horseracing and betting depend on each other like nowhere else in sport, which is why the whole ecosystem needs to be sustainable, not one part of it,” Renshaw added.
The British Horseracing Authority (BHA) raised significant concerns about the tax hike's potential fallout. BHA Chief Executive Brant Dunshea pointed out that with horseracing receiving nearly a third of its annual £350 million funding from high street betting contributions, the MGD rise could lead to a revenue decrease of up to £57 million annually. This revised estimation is a 38% drop from former predictions if the duty were to be doubled. Dunshea warned that such a shortfall poses a threat to prize money, racecourse operations, employment, and essential horse welfare initiatives. “This change could prove devastating for the future of our sport,” Dunshea stated. He further indicated that the BHA intends to engage with the government to explore strategies for mitigating the impacts of the new tax policy.
Conversely, the increase was met with approval by some groups, including the All-Party Parliamentary Group (APPG) on Gambling Reform, which welcomed both the MGD hike and the removal of business rates relief for adult gaming centers. The APPG supports higher taxation on products associated with greater social harm and has advocated for stricter restrictions in the gambling sector. Co-chair Alex Ballinger MP, who recently pushed for a MGD doubling, noted, “Having consistently called for fairer taxation of the gambling industry and measures to prevent gambling harm, we are pleased to see the government accept again that higher harm products should be taxed at a higher rate.”
