Healey raises machine games duty to 25%, below the feared 40%

The five-point rise falls well short of the 40% rate sought by a think tank and 90 Labour MPs, and will help pay for business rates support on the high street.

UK Chancellor John Healey has raised machine games duty (MGD) from 20% to 25% on higher stakes gaming machines. He announced the rise in his first Budget on 28 October, after months of industry warnings about a possible doubling.

What Healey announced

Healey told the House of Commons that the rise would pay for business rates support for high street businesses.

John Healey, Chancellor of the Exchequer, said: 

‘To pay for this support for our high streets, I’m raising taxes on gambling by increasing Machine Games Duty from 20% to 25% for higher stakes machines, whilst protecting pubs and seaside arcades.’

From April 2027, adult gaming centres (AGCs) and vape shops in England will also lose access to the retail, hospitality and leisure business rates discount, according to the Budget document.

How the duty works

MGD has three rates set by law. Machines are banded by the maximum stake and prize, not by gambling machine category.

Most machine games duty is paid at the 20% standard rate, from betting shop terminals to pub fruit machines. The 25% rate already exists, but only for machines that cost more than £5 a play, and almost none do.

From 1 April 2027, the rate rises from 20% to 25% for machine games with stakes over £1 or prizes over £100. The Budget document describes these as higher-risk machines commonly found in venues such as AGCs. Lower-stake machines keep their current rate, which protects pubs and seaside arcades.

From 1 April 2028, machine suppliers will also become liable for the duty on supplier-owned machines run under profit-sharing arrangements. A consultation on that change closes on 20 January 2027. The government expects the two changes together to raise £135 million in 2027/28 and £150 million in 2028/29.

Short of the 40% campaigners wanted

The Social Market Foundation (SMF) think tank called in June for MGD on Category B machines to double to 40%. In October, 90 Labour MPs wrote to Healey backing a higher rate.

Analysis commissioned by the Betting and Gaming Council (BGC) claimed that doubling the duty could cost almost 16,000 jobs and close up to 1,470 betting shops and 34 casinos. On 14 October, the chief executives of Entain, Evoke, Flutter UK & Ireland, bet365, Bally’s, and Betfred asked Healey to rule out a machine games duty rise. 

The SMF gave the decision a mixed welcome. Gideon Salutin, chief economist at the SMF, said: ‘We’re pleased the government has chosen to raise tax on machine games duty, reflecting the higher harm associated with this form of gambling.’ 

Casino and bingo operator Rank Group had warned against any rise. Richard Harris, chief executive of Rank Group, said in the company’s Q1 trading update this month: ‘Our message has been clear: any increase to machine games duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment.’

Follows last year’s online duty rises

The MGD rise comes on top of the online duty increases announced in the November 2025 Budget.

Operators are already cutting costs. Flutter said last week it plans to cut up to 1,400 jobs in its UK and Ireland business, citing the remote gaming duty rise.

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