Entain has raised concerns in a letter to Prime Minister Andy Burnham regarding the possible consequences of a proposed hike to the Machine Games Duty (MGD).
With the government’s Autumn Budget approaching in October, Entain’s CEO, Stella David, warned that doubling the current MGD rate to 40% could lead to significant betting shop closures and substantial job losses, possibly resulting in decreased tax revenue for the government.
The speculation about an MGD increase originated from The Financial Times, which reported that Chancellor John Healey is considering this tax raise based on recommendations from the Social Market Foundation, which suggested the change in a recent paper.
Burnham has previously announced plans to eliminate the “aim to permit” for betting shops, mandating that adult gaming centers (AGCs) obtain planning permission to operate.
David's letter highlighted that imposing another tax increase, following April’s increase in Remote Gaming Duty (RGD) to 40% of Gross Gaming Revenue (GGR), could raise Entain’s annual retail operational costs by £100 million. She noted that this might result in up to 1,470 shop closures and the loss of approximately 15,900 jobs, according to estimates commissioned from the Betting and Gaming Council and consultancy EY.
Emphasizing the potential impact on local employment, David wrote, “They are people losing their jobs and communities losing long-established high-street businesses. These jobs matter. They matter particularly in communities where good local employment can be difficult to find.”
She pointed out that nearly half of Entain’s retail workforce comprises women, with over 50% working flexible or part-time hours, while more than 2,500 employees are under 25 years old.
The letter argued that the proposed tax increase would negatively affect the workers and communities that Labour’s “Makerfield Test” intends to protect, potentially costing the government more in lost revenue than it would generate.
Entain underscored the significance of its retail operations for local employment and community relations, noting that machine gaming revenue supports shops outside of race days and contributes around £50 million annually to British horse racing.
The company warned that raising the MGD could push customers toward illegal gambling markets, estimating that up to £1 billion in gambling stakes could shift to unregulated platforms. Analysis from the Office for Budget Responsibility suggested that previous gambling tax increases have actually decreased anticipated tax receipts, including a £500 million reduction in forecasted revenue for 2029-30; this revenue could end up enriching the black market instead.
A new report commissioned by Euromat, and conducted by Regulus Partners and Helios, projected that Europe’s black market for gambling has been growing at an annual rate of 18% from 2019 to 2026, with a potential value of up to €13 billion by the year’s end.
Entain has requested meetings with government officials to express its concerns and to facilitate discussions between ministers and shop staff before final decisions on the budget.
In addition to addressing the MGD issue, Entain disclosed it has initiated consultations that may lead to the elimination of around 400 customer care positions from its 2,000-strong team in the UK. David stated that this move is part of a broader initiative to streamline operations, enhance efficiency, and improve customer experiences while establishing centers of excellence at various locations.
“The proposed changes are being made to ensure our business remains competitive, financially resilient, and well-positioned for the future as our sector faces an increasingly challenging operating environment,” she said.
“This decision has not been made lightly, and our immediate priority is to support those colleagues who may be affected by this transition.”
Earlier this year, Entain announced a global cut of 500 roles across its operations and central functions, stating that this restructuring was not a direct response to the previous RGD increase, but a part of the new CFO Michael Snape's cost-cutting plan.
At that time, the company noted, “As part of our ongoing focus on enhancing Entain’s operational efficiency and agility, we have begun implementing organizational changes which will regrettably impact a number of roles across the group over the months ahead.”
Entain also reduced its Ladbrokes retail presence in Ireland by over a third in April and reportedly stepped back from discussions to sell its entire Ladbrokes retail estate.
Recently, Bet365 announced the elimination of more than 300 jobs in response to the tax increase in the UK.
