In the United Kingdom, chancellor John Healey‘s decision to increase Machine Games Duty (MGD) from 20% to 25% has divided politicians and the gambling industry, with supporters of tougher regulation welcoming the measure while opponents warn of consequences for betting shops, employment and British horse racing.
Announced in the latest UK Budget, the increase applies to Category B gaming machines. The government intends to use additional gambling tax revenue to support high street businesses, although the decision has renewed concerns about the financial pressure facing gambling operators following previous tax increases.
Reactions have exposed differences across Westminster over how gambling businesses should be taxed. Several Labour MPs and Green Party representatives argued that the government should have gone further, while Reform UK and Conservative politicians highlighted potential consequences for the sector and associated industries.
Reform Advocates Welcome Higher Machine Duty
Labour MP Alex Ballinger, representing Halesowen, welcomed the increase, describing it as a response to the risks associated with rapid-play gaming machines.
“I warmly welcome the Chancellor’s decision to increase the standard rate of Machine Games Duty from 20% to 25% on high-harm machines, as well as excluding adult gaming centres from business rates relief,” he wrote according to SBC News. “These are important steps towards putting our communities first and ensuring the tax system better reflects the risks posed by rapid-play, addictive machines. Gambling can devastate lives, tear families apart and leave communities bearing the cost. The Chancellor is right to act – supporting our high streets should mean backing local businesses that help them thrive, not serving the interests of the gambling industry. We must now build on today’s progress with stronger protections.”
Green Party leader Zack Polanski criticized the Budget, describing its approach to gambling taxation as insufficient. “We got a budget that was tinkering around the edges. Business as usual. Whether that was on energy bills, refusing to bring in rent controls to tackle unaffordable rents, and on banks and gambling companies, this budget was so soft that their shares rose before the Chancellor even sat down.”
Polanski also pointed to the rise in gambling company share prices following the announcement as evidence that the increase had fallen short of expectations.
Industry Opponents Warn of Closures and Job Losses
Reform UK leader Nigel Farage was among the politicians criticizing the tax increase. The party has previously positioned itself as supportive of gambling businesses and recreational betting.
Responding to the Budget, Farage said: “Betting shops are in big, big trouble, and it seems that Burnham hates betting shops. If betting shops are in as big a trouble as I think, then the British horse racing industry is in even bigger trouble and horse racing is a very, very big part of rural life. And so I worry that taxes like this actually become self-defeating.”
Farage identified potential betting shop closures, vacant high street premises and financial pressure on British horse racing as possible consequences. He also warned that higher taxes could encourage more customers to use illegal gambling platforms.
Conservative Shadow Minister for Culture, Media and Sport Louie French raised similar concerns, particularly regarding employment and sports sponsorship.
“Cheered on by the Liberal Democrats, the chancellor has announced a further tax hike on gambling, which will likely damage British racing, jobs, and sponsorship of sports,” he stated. “The Treasury were warned that their tax hikes will only serve to fuel the illegal black market, which is a lose-lose for consumers, government and sport. Labour has given up on British racing and rural communities.”
The industry’s opposition has also focused on the future of retail betting. Industry representatives have argued that additional taxation could make some retail operations financially unsustainable, increasing the risk of closures and leaving empty commercial premises in town centers.
Gambling Shares Rise Following Budget Announcement
Despite the criticism, gambling companies recorded gains on the stock market after Healey confirmed the 25% rate. Entain, the owner of Coral and Ladbrokes, rose 6.2% to 480.61 pence, while bingo operator Rank Group gained 7.6% to 84.90 pence.
The increases followed concerns that the government might raise Machine Games Duty to 40%. The confirmed rate was below the level that some market participants had anticipated.
Healey defended the gambling tax increase as part of the government’s plans to support high street businesses, saying: “I’ve made my choice at this Budget — asking a bit more of our banks to support ordinary people, raising taxes on gambling to support good growth on every high street.”
The decision has become a wider point of disagreement over the gambling industry’s economic contribution and the government’s approach to reducing gambling-related harm. While reform advocates have called for higher duties, opponents continue to warn about potential effects on retail employment and British racing. The 25% rate establishes the government’s current position, although debate over the financial and social consequences of gambling taxation is likely to continue.