UK raises Machine Games Duty to 25% – what does it mean for the industry?

Here's what operators, suppliers and land-based gaming businesses need to know.

What is Machine Games Duty?

MGD is a UK tax on the net takings from gaming machines – essentially the money received from players minus winnings paid out.

It affects businesses operating gaming machines across betting shops, casinos, bingo halls, arcades and adult gaming centres.

What exactly is changing?

The 25% higher rate already exists, but previously applied to machines with a maximum cost to play above £5.

From 1 April 2027, the thresholds will change:

• Machines with a maximum stake above £1 will attract 25% MGD.
• Machines with a maximum prize above £100 will also attract 25% MGD.

Either condition is sufficient to trigger the higher rate. This means many machines commonly found in betting shops, casinos, bingo venues and adult gaming centres will be affected.

Why a 5-percentage-point increase matters

The rate rises from 20% to 25%.

While this sounds like a relatively small adjustment, it represents a 25% increase in the duty rate itself. For operators with significant gaming machine revenue, the additional tax burden could be substantial.

What will it cost operators?

Some major operators have already quantified the expected impact:

• Entain (Ladbrokes, Coral): approximately £25 million in additional annual costs, before mitigating measures.
• Rank Group (Grosvenor Casinos, Mecca Bingo): approximately £9 million in additional annual costs, before mitigating measures.

These figures demonstrate the financial exposure even for established industry players.

A second financial hit for adult gaming centres

From April 2027, Adult Gaming Centres in England will also lose eligibility for the Retail, Hospitality and Leisure business rates multipliers. This means affected venues could face two additional financial pressures at the same time: higher gaming machine duty and increased business rates.

Industry reaction is divided

Goodbody described the MGD increase as tolerable for the sector, suggesting it could accelerate consolidation. Regulus Partners, however, warned that the additional cash-flow pressure could prove fatal to many marginal venues.

The industry is already facing significant pressure. More than 600 betting shops have closed or announced closures since the previous Budget, according to the Betting and Gaming Council.

These closures predate the new MGD announcement.

Another major change coming in 2028

From 1 April 2028, responsibility for MGD will move to machine suppliers for supplier-owned machines operated under profit-sharing arrangements. Operators will generally remain liable for machines they own outright or operate under fixed rental or lease arrangements while controlling the takings.

The government consultation on implementing this change closes on 20 January 2027.

Our take

The impact goes beyond a simple tax increase. Large operators have greater capacity to mitigate additional costs, while smaller and financially marginal venues could face more difficult decisions.

Combined with changes to business rates and the wider regulatory environment, the measures could accelerate consolidation across the UK land-based gambling sector. The consequences for machine suppliers, venue operators and the wider high street will become clearer as businesses adapt.

What do you think: a manageable tax increase, or another blow to the UK land-based gambling industry?

Follow iGaming Centre for more industry news, business insights and regulatory updates.

1. HMRC – Machine Games Duty: Increasing the rate on higher stake and prize machines.

2. UK Budget 2026 – Official government document.

3. Entain – Statement on UK gambling tax increases.

4. Rank Group – Official announcement.

5. HMRC – Consultation on changing MGD liability.

6. iGaming Business – Industry reaction and analyst comments.