On Wednesday, leaders from the UK casino sector expressed serious concerns about the potential doubling of machine games duty (MGD), suggesting that this increase, paired with broader economic challenges, could significantly hinder investment and threaten job security, particularly as the industry works towards modernization.
These remarks came during a panel discussion at the Hippodrome Casino in London, which included executives from prominent operators like Rank Group, Genting Casinos, and the Hippodrome, alongside representatives from the Night Time Industries Association (NTIA) and consultancy firm Regulus Partners.
Richard Harris, CEO of Rank Group, articulated his worries over the effect of rising taxes, stricter regulations, and increasing operational costs on the industry. "In my four and a half years, we’ve closed four of our venues,” he noted, indicating that the pressures from high cost bases and escalating taxes have resulted in strained profitability and cash flow for operators.
He explained that the speculation over potential tax hikes has already influenced investment plans. This sentiment was shared by Paul Willcock, COO of Genting Casinos, who said, “The prospect of MGD hikes is keeping us all awake.”
The proposed increase in MGD from 20% to 40%, initiated by the Social Market Foundation several months ago, may be included in the government's upcoming autumn budget. However, the gaming sector has strongly opposed this proposal, warning of detrimental effects on retail businesses.
In September, Fred Done, owner of Betfred, stated that such a tax increase could force his company to shut down 495 shops within one year, resulting in the loss of 2,575 jobs and about £67 million in missed tax revenue for the Exchequer.
Willcock emphasized that clarity and some relaxation regarding tax policies could lead to increased investment, pointing out Genting’s significant global investment activities. “Genting has invested $5 billion on the Las Vegas Strip in the last five years. In New York, it spent $5 billion, and in Singapore, $3 billion,” he said, adding that the company is eager to invest in the UK if the regulatory environment is favorable.
Simon Thomas, executive chairman of the Hippodrome, discussed the necessity of confidence in the industry, asserting that operators need stable regulatory and financial conditions to encourage investment over typical cycles of three to seven years. Harris succinctly noted, “Profit is the source of future investment,” reinforcing that consistent conditions allow operators to effectively generate and reinvest profits.
The panel acknowledged the Gambling Commission’s 2025 land-based modernization reforms, which will increase the number of slot machines allowed per casino from 20 to up to 80 and ease certain ancillary betting regulations. Harris revealed that Rank Group has boosted its machine estate by approximately 65%, growing from 1,400 to 2,250 machines, following an investment of £15 million in a single venue driven by these reforms.
However, they warned that these changes would require time to fully integrate and that regulatory stability must accompany liberalization efforts for the sector to thrive.
Dan Waugh from Regulus Partners pointed out the need to assess whether these reforms enhance customer experiences and broaden appeal, questioning, “Are these better places to go to as a result of the regulated reforms?”
The casino sector reported a potential investment pipeline of around £200 million over the coming years. Kill noted the broader economic advantages that sustained investment in casinos could deliver, including benefits for high streets, night-time economies, jobs, and local supply chains.
In a report discussed at the panel, Kill stated that 58% of respondents, a mix of casino patrons and the general public, cited the casino as their primary reason for visiting an area, while 55% indicated they would likely not have visited without its presence.
The NTIA also warned that if MGD were to increase, job losses could reach about 3,800 nationwide, revealing survey results indicating that 95.7% of operators would consider reducing staffing levels, with 91.3% contemplating cuts to venue investment. Alarmingly, 60.9% might have to close venues completely.
Panelists highlighted the significant employment role of casinos and their contributions to communities. Willcock pointed out that Genting employs roughly 3,500 people in the UK, underscoring a thorough training process for new staff: “There’s significant training, six weeks of training before anybody can go anywhere near a casino table,” he said.
Kill and Waugh further elaborated on the societal benefits provided by casinos, which contribute to perceptions of safety in town centers during late-night hours and facilitate community gatherings. “People coming after midnight feel safe due to the service levels and engagement, the lighting, etc.,” Kill observed.
The industry leaders collectively urged the government to allow the 2025 reforms to be implemented fully without imposing immediate tax increases. Kill called for “a chance to bed in” these reforms and stressed the importance of recognizing casinos as integral components of the wider hospitality sector that support 24-hour economies.
Willcock and Harris underlined that a clear and sustainable fiscal framework would stimulate further major investments. Waugh cautioned against excessive public health-focused regulation, advocating instead for balanced policies that protect consumers and facilitate sustainable business growth.
Regulus recently released an analysis suggesting that the horse racing industry could face a potential loss of around a third of its annual revenue, approximately £92 million, should the MGD hike be enacted.
