A coalition of nearly 90 Labour MPs is advocating for a significant increase in the machine games duty (MGD) on Category B gaming machines, proposing a hike to 40% ahead of the government's upcoming Autumn Budget. The motion has garnered support from former Prime Minister Gordon Brown.
The push for this initiative is led by Alex Ballinger, the Member of Parliament for Halesowen, who has called on the Chancellor to heed recommendations from the Social Market Foundation (SMF). According to estimates from SMF, increasing the MGD could potentially boost tax revenue by between £275 million and £458 million each year.
Category B machines have the capability to pay out winnings of up to £500 and are commonly found in various locations including betting shops, bingo halls, and arcades throughout the UK. The current MGD rates range from 5% to 25%.
Proponents of the tax increase argue that gambling establishments often thrive in less affluent communities, and that the availability of high-winnings terminals correlates with an increase in gambling-related harm. Ballinger has proposed that all exemptions for machines in pubs should be reconsidered.
However, this proposed legislation has raised concerns within the gambling industry. Organizations such as the Bingo Association, Bacta, and the Betting and Gaming Council argue that elevating taxes in this manner could lead to job losses within the sector. In light of this, several gambling companies have already begun announcing layoffs and the closure of betting shops across the UK.
The Betting and Gaming Council has also launched the "Back Our Betting Shops" campaign to oppose further regulatory pressures on gambling operations. Fred Done, the founder of Betfred, warned that an increase in MGD could drive high street bookmakers out of business by the year 2030. Additionally, Rank Group has projected that a third of its venues would be forced to shutter due to these tax increases. In a show of opposition, over 1,000 representatives from the greyhound racing industry have sent a letter against the proposed hike in the tax.
