UK gaming hall operators are sounding the alarm over a potential rise in Machine Games Duty (MGD) that could see closures and job losses. A recent industry survey highlights concerns over a proposal from the Social Market Foundation (SMF), which suggests increasing MGD on Category B slot machines to 40%. This move aims to align taxes with the newly imposed Remote Gaming Duty on online counterparts.
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Operators Voice Concerns
Category B devices, common in betting shops, arcades, and bingo halls, currently face a tiered MGD—5% on stakes up to 20p, 20% for stakes up to £5, and 25% above that. The SMF’s plan seeks to keep Category C machine rates at 20% and low-stake devices at 5%, shifting the burden to riskier machines while protecting pubs. However, Bacta, the trade association representing gaming halls, conducted a Pulse survey showing fears about deep economic impacts if the tax hike occurs. And it seems operators aren’t taking these proposed changes lightly. Every respondent in the survey predicted a negative impact, with 90% forecasting a “severe negative impact”. Maintaining profitability emerged as the biggest challenge, according to 67% of respondents, while others flagged staff retention and investment issues.
Impact on Investment and Employment
A major increase in MGD could lead to a downturn in investment—a situation that 87% of Bacta members believe is “very likely”. Potential consequences include closures of adult gaming centers, a decline in profitability, and job cuts. According to Bacta President Joseph Cullis, “The licensed, regulated sector retracting will only benefit the illegal unregulated sector.”
Cullis also stressed that many amusement arcades, especially in seaside towns, rely on gaming revenue to remain viable year-round. That income not only keeps staff employed but also helps maintain Britain’s coastal heritage sites. He added that on top of MGD, operators are burdened with business rates, VAT, and other rising costs, which makes any further tax hike potentially devastating.
Regulatory and Economic Context
This proposed MGD increase coincides with broader governmental economic maneuvers, as the SMF supports tax hikes ahead of the Autumn Budget. In November, a general betting duty on online sports wagers increased from 15% to 25%, effective April 2027. Meanwhile, the land-based sector avoided changes, with no rise in the tax rate on high street betting shop bets. Horse racing bets were exempt from rate increases, and the 10% tax on bingo was scrapped. Whether the SMF’s proposal gains traction remains to be seen, but the timing is notable—just as the newly elected Prime Minister, Andy Burnham, takes office. Industry insiders will be watching closely how these potential changes unfold and whether policymakers heed the calls from the gambling sector.
What Comes Next
The next few months will be crucial. Industry voices are expected to push back against these proposals in discussions leading to the Autumn Budget, while operators brace for the potential economic fallout. The government’s final decision on the MGD increase, expected before year’s end, could reshape the market of the UK’s gaming industry.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
