The upcoming increase in Machine Gaming Duty (MGD), set to take effect in April 2027, has raised serious concerns about potential job losses and the closure of betting shops, alongside an estimated £57 million hit to the horseracing industry. Despite these warnings, the market reacted positively; major operators experienced a surge in share prices following the announcement that Chancellor John Healey would not implement the feared doubling of the duty.
Steve Grech, the Group CEO of Trust Payments, praised the government’s decision and the avoidance of a 40% duty. He pointed out that the 25% MGD still represents a significant challenge for operators, particularly those with thin margins. Grech suggested that the delay until 2027 provides businesses with a crucial opportunity to revisit pricing strategies and investment plans. However, he warned that this could lead to a shift in tax burdens from physical establishments to online platforms. "It’s still a significant increase for operators with tight margins," he noted. "The worry is that tax will migrate to responsible, regulated online offerings."
In the immediate aftermath, share prices for leading operators such as Entain and Rank Group rose by about 7%, signaling relief among investors and an expectation that the sector will adapt.
The Betting and Gaming Council (BGC) criticized the MGD increase, describing it as "deeply damaging". Grainne Hurst, the BGC chief executive, cited independent modelling from EY that predicts nearly 9,000 job losses and poses a severe threat to approximately 1,000 betting shops and casinos. Hurst expressed concern that the loss of these venues could negatively impact high streets and inadvertently boost illegal gambling.
Entain, a major UK operator, shared this apprehension, estimating an annual cost of around £25 million to its retail operations in the UK and Ireland. CEO Stella David previously voiced her concerns in an open letter to Prime Minister Andy Burnham, initially anticipating a tax rise that would double. David noted that forecasts for retail operational expenses had decreased by £75 million annually with the updated tax increase. She emphasized the potential negative impacts on jobs, high streets, and the industry as a whole, highlighting a risk of consumers being pushed toward unregulated gambling markets. "These additional tax changes will further compound damage and push more people into the growing illegal market," David stated.
Bingo Association CEO Nicole Garrett highlighted that the MGD rise will hinder future investments for bingo clubs. She articulated frustration, pointing out that after the government pledged support by abolishing Bingo Duty, they have essentially retracted that support, endangering hundreds of jobs.
Mark Renshaw, CEO of Spotlight Sports Group and publisher of the Racing Post, discussed the adverse effects on the horseracing industry. He indicated that the closure of over 600 betting shops since the last Budget has already led to a £17 million loss in levy and media rights payments to horseracing. Renshaw asserted the interdependent relationship between horseracing and betting, stressing that a sustainable ecosystem is critical.
Brant Dunshea, Chief Executive of the British Horseracing Authority (BHA), warned that increasing MGD could result in a significant drop in funding for horseracing, which relies on high-street betting contributions for nearly a third of its £350 million annual budget. This tax rise could lessen revenues by up to £57 million, impacting prize money, racecourse operations, employment, and vital horse welfare programs. Dunshea remarked, "This change could prove devastating for the future of our sport."
Conversely, the All-Party Parliamentary Group (APPG) on Gambling Reform welcomed the MGD increase along with the removal of business rates relief for adult gaming centers. Co-chair Alex Ballinger MP has been a longstanding advocate for stricter tax measures aimed at products associated with social harm. "We are pleased to see the government accept again that higher harm products should be taxed at a higher rate," Ballinger stated, acknowledging the need for measures that address the social harms of gambling.
