UK gaming operators warn machine duty hike could trigger closures and job losses

Operators across the UK's land-based gaming sector have warned that a proposed rise in Machine Games Duty (MGD) would accelerate venue closures and job losses, according to a new industry survey.

The Social Market Foundation (SMF) has called for the duty on Category B slot machines to be increased to 40 per cent, matching the new Remote Gaming Duty that applies to online gambling from April. Category B machines - the most common type of electronic gaming terminal in betting shops, arcades and bingo halls - offer top prizes of £500 and are currently taxed at 5 per cent on stakes up to 20p, 20 per cent on stakes up to £5 and 25 per cent beyond that. The SMF has proposed keeping the rate for Category C pub machines at 20 per cent and for lower-stake devices at 5 per cent, saying the shift would target riskier machines while protecting the hospitality trade.

Survey highlights unanimous concern

Bacta, the trade body for the amusement and gaming machine sector, ran its Pulse survey of members before Andy Burnham was confirmed as the UK's new Prime Minister. The responses showed total opposition to a significant MGD increase: all participants called the effect negative, with 90 per cent rating it as a severe negative impact and the rest calling it moderately negative.

When asked what the biggest challenge would be following an increase, 67 per cent of members named remaining profitable, 23 per cent said maintaining staff levels and 10 per cent said investing in new machines and refurbishment programmes. The prospect of an MGD rise also appears to be weighing on investment plans - 87 per cent said a downturn in investment would be very likely if the tax went up, while 3 per cent said likely and 10 per cent were undecided.

In practical terms, members most frequently predicted that an increase would lead to the closure of some adult gaming centres (43 per cent), a fall in profitability (30 per cent) and reduced staffing (27 per cent).

Sector warns of wider damage

Bacta president Joseph Cullis said the survey reinforced the industry's position that raising machine taxes would hurt high streets, seaside towns, clubs, pubs, bingo venues, manufacturers and suppliers. "If the licensed, regulated sector retracts it will be the illegal unregulated sector that benefits," he said.

Cullis also argued that seaside piers and amusement arcades depend on gaming income to support year-round employment and to maintain heritage buildings and attractions. He said the sector already faces a heavy tax burden, including business rates, irrecoverable VAT, the statutory levy, wage costs, national insurance, energy bills, licence fees and compliance costs, and that a further MGD increase would "tax the industry into terminal decline" rather than support economic growth.

The SMF had backed tax increases before November's Autumn Budget, which eventually left land-based gambling untouched. The Budget raised general betting duty on online sports wagers from 15 to 25 per cent (effective April 2027), exempted horse racing bets from the rise and scrapped the 10 per cent tax on bingo.