The UK’s Chancellor of the Exchequer is reported to be pondering delivering another significant blow to the country’s gambling sector ahead of the Autumn Budget.
John Healey is considering increasing Machine Games Duty, according to The Times, as the new look government continues to threaten imposing more stringent measures on the industry.
It comes as the government looks to raise funds for defence spending and to reduce the cost-of-living crisis, but may turn out to be a hammer blow for the wider sector, and particularly for horse racing.
Healey has been coy on the topic of tax rises in general, but if Machine Games Duty was to double (from the lower rate of 5% to 10%, the standard rate of 20% to 40%, and the higher rate of 25% to 50%), there could be severe blows dealt to the sector.
Industry analysts have already told the Racing Post that a doubling of Machine Games Duty could lead to nearly 3,000 shop closures and a reduction of the all-important horse racing levy by some £70m.
The news also follows Gordon Brown’s calls for the duty to be hiked in order to fund relief for rising domestic fuel prices this winter.
A plethora of politicians have called for tax rises on the gambling sector in the past, to support causes including the NHS, grassroots sports and ending child poverty.
Machine Games Duty rise would add to industry woes
The industry was dealt a mammoth blow in last year’s Autumn Budget, as then-Chancellor Rachel Reeves announced a near-doubling of Remote Gaming Duty from 21% to 40%.
This was implemented in April. Reeves also stated the government’s intention to increase General Betting Duty from 15% to 25% in April 2027.
The initial impact of this has already been clear to see in interim results posted by PLCs with a UK focus, including Entain, evoke, Flutter Entertainment and FDJ United.
There is the large possibility that mid-tier operators in the country may be wiped out due to the tax rises to make way for the bigger players who will eat up market share.
Another concern for the industry is the fact that these measures push consumers towards the black market, which the Betting and Gaming Council (BGC), the UK’s trade body, has consistently warned of.
The BGC has also weighed in on the situation regarding a potential doubling of Machine Games Duty.
“It would put further pressure on betting shops, casinos and other venues, cost jobs and investment, weaken high streets and benefit the growing illegal gambling market,” a BGC spokesperson said.
“By the end of 2026, more than 600 betting shops will have closed and 5,000 jobs will have been lost since last year’s budget following increases in remote gaming duty.
“Doubling tax on a land-based product would lead to more closures, further job losses and damage to the wider ecosystem that supports British racing.”
