UK Chancellor John Healey is reportedly weighing an increase in Machine Games Duty (MGD) on gaming machines, according to The Times. This move, ahead of the October 28 budget, aims to raise additional revenue for the Treasury to fund cost-of-living measures and increased defense spending. The proposed increase could see the lower MGD rate rise from 5% to 10%, the standard rate from 20% to 40%, and the higher rate from 25% to 50%.
Industry analysts have warned that a doubling of MGD could lead to the closure of nearly 3,000 betting shops and a reduction of approximately £70 million in the horse racing levy. The Social Market Foundation (SMF) think tank had earlier proposed doubling the tax on Category B machines, found in betting shops, from 20% to 40%, suggesting it could generate an additional £275 million to £458 million in tax revenue. However, the Betting and Gaming Council (BGC) strongly opposes any increase, arguing it would lead to job losses, weaken high streets, and benefit illegal gambling operations.
Sources indicate that while betting shops and adult gaming centers might face higher taxes, pubs and bingo halls could receive carve-outs or exemptions. This aligns with Prime Minister Andy Burnham's reported stance, with one source stating, "Andy hates adult gaming centres... But, like all politicians, he loves bingo halls and pubs." The retail betting sector has already seen significant closures, with over 600 betting shops and 5,000 jobs lost since last year's budget due to factors including increased online gambling taxes, higher energy costs, and the national insurance hike.
While no official announcement has been made, and the Treasury spokesperson declined to comment on speculation, the potential tax hike comes a year after remote gaming duty increased from 21% to 40%. The government is under pressure to find billions of pounds in additional revenue, and gambling taxes are reportedly back "on the table." The Chancellor is expected to detail any changes in the upcoming budget.
