The Social Market Foundation (SMF) is advocating for an increase in Machine Games Duty (MGD) on Category B electronic gaming machines. This push comes ahead of the upcoming budget announcement. According to SMF’s latest report, the current tax structure underestimates the societal damage these machines cause, unfairly shifting the economic burden related to problem gambling onto taxpayers. Gideon Salutin, SMF’s chief economist, and senior researcher Richard Hyde suggested implementing a new MGD band that would see Category B machines taxed at a rate above the current 20%.
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Proposed Tax Structure and Financial Projections
The SMF proposes doubling the MGD on Category B machines to 40%. This rate mirrors the Remote Gaming Duty applied in 2025. Their models project this could generate between £275 million and £458 million annually, assuming some fluctuation in gambling behavior. For every 5% increase beyond the initial 20%, an additional £51 million to £114 million could be raised. Meanwhile, Category C and D machines would remain at the established 20% and 5% rates respectively. In 2023-24, adult gaming centers — housing 42% of EGMs in Britain — saw 11% revenue growth, totaling around £623 million. However, the SMF highlighted the disproportionate concentration of these centers in deprived areas, where nearly half are located. Additionally, the economic impact of machine-related harms is pegged at £2.33 billion annually, factoring in costs related to welfare, crime, and health services.
Industry Reactions and Public Opinion
Polling commissioned by SMF in April 2026 demonstrates public support for increasing taxes on high-street betting shop machines, with 43% of respondents favoring the move. However, the Betting and Gaming Council (BGC) strongly opposes the proposal. A spokesperson from the BGC warned that the tax hike could severely impact high-street venues and potentially result in major job losses. Still, the BGC highlighted the vital role that venues like bingo clubs and casinos play in local communities. They argue that higher taxes would lead to numerous closures and a weakened high street presence. Regulus Partners, a consultancy firm, echoed these concerns, predicting that up to 70% of betting shops could shutter under the new tax scheme, which they estimate would affect around 4,000 of the UK’s 5,500 betting venues. They claim the proposed tax changes could halve betting shop revenue from £1.2 billion to just £600 million and drastically reduce AGC revenue from £550 million to £115 million.
Potential Risks and Market Impact
Regulus Partners also forecasted dire industry outcomes should the tax hike proceed, expecting up to 43,000 direct jobs to be lost. They warned that the closures could hit media rights payments and levy revenue for British horseracing by an estimated £100 million. Additionally, a major portion of displaced gambling revenue might flow into the black market. However, the SMF contests these concerns, citing international data that don’t show a direct correlation between remote gaming taxes and increased illegal gambling activity. The proposed tax hike isn’t without its uncertainties. Still, how operators will react — whether absorbing costs, passing them on, or cutting expenses — remains to be seen. And if gambling expenditures fall, it’s unclear how they might redirect to other sectors. The longer-term impact on both employment and public revenues will likely unfold as the situation develops. The UK government’s next budget meeting will reveal whether these recommendations influence tax policy, potentially reshaping the market for high-risk gaming machines.
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.
