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Conservative Leader Kemi Badenoch Warns Gambling Taxes Will Put “Good Companies Out of Business”

By jili tutorial · September 24, 2026

Conservative Leader Kemi Badenoch Warns Gambling Taxes Will Put “Good Companies Out of Business”

Overview: A New Political Battle Over UK Gambling Taxation

Kemi Badenoch, leader of the Conservative Party, has launched a sharp attack on the Labour government’s approach to gambling taxation, describing it as a “tax doom loop” that harms the economy and “cannibalises” the high street. Her criticism comes as attention turns to the first Autumn Budget of newly appointed Chancellor John Healey, with speculation mounting that the Treasury may increase Machine Games Duty (MGD) in the upcoming announcement.

This is not the first time industry stakeholders have raised alarm. Betfred founder Fred Done and Entain Chief Executive Officer Stella David have already voiced strong objections. Badenoch’s intervention adds political weight to the growing backlash against what many see as a punitive tax regime.

The “Tax Doom Loop” Explained

What Badenoch Means

Speaking to the national newspaper The Sun, Badenoch outlined her central argument:

“Labour are in the tax doom loop. They raise taxes, businesses close, less money comes in, and so they have to raise taxes even further. What they’re doing is just cannibalising business.”

She warned that compliant, law-abiding companies—those that pay their taxes and follow regulations—would be forced out of business. This, she argued, would drive punters toward the unregulated black market, undermining both tax revenue and consumer protection.

Why This Matters for the UK Economy

The “tax doom loop” concept is not unique to gambling—it mirrors debates in other heavily taxed sectors such as alcohol, tobacco, and fuel. In gambling, however, the stakes are particularly high because:

Machine Games Duty: What Is at Stake?

Background on the Tax

Machine Games Duty (MGD) is a tax levied on profits from gaming machines (e.g., fixed-odds betting terminals) in betting shops, casinos, and bingo halls. The current rate structure varies by machine type and stake level, but any increase would directly affect the profitability of thousands of licensed venues.

Rumoured Increase in the Autumn Budget

Chancellor John Healey is expected to deliver his first Autumn Budget in the coming weeks. Industry insiders fear that MGD could be raised as part of a broader effort to close the fiscal gap. The Betting and Gaming Council (BGC) has already modelled the potential impact:

BGC CEO Grainne Hurst stated publicly:

“Public policy should not be driven by assumptions or ideology. It should be driven by evidence and an honest assessment of consequences… If ministers follow the SMF’s advice, they will not simply increase Machine Games Duty. They will make a conscious decision to place legitimate businesses under even greater pressure, jeopardise thousands of jobs, weaken horseracing and accelerate the decline of community venues that have served Britain for generations.”

Industry Reaction: A Unified Front

Fred Done’s Dire Prediction

Over the weekend, Betfred founder Fred Done warned that retail betting could become extinct by 2030 under the current tax and regulatory environment. Done, a veteran of the industry, pointed to the cumulative effect of rising duties, business rates, and compliance costs.

Stella David’s Plea to the Prime Minister

Entain CEO Stella David recently wrote directly to Prime Minister Andy Burnham after the latest round of job cuts at the company. She urged him to show sympathy toward the licensed industry, arguing that excessive taxation was forcing operators to reduce headcount and investment.

Echoes from Major Operators

Several large operators have indicated that they might capture market share from smaller, mid-tier bookmakers that are more vulnerable to tax rises. Yet even these industry giants—such as Flutter Entertainment (owner of Paddy Power, Sky Bet, and Betfair), the upcoming combined entity of Evoke and Bally’s Intralot, and Super Group’s Betway—are not supportive of the increases.

Evoke CEO Per Widerström laid bare the negative impacts that hikes in Remote Gaming Duty (RGD) and General Betting Duty (GBD) would have on his company following Rachel Reeves’ Autumn Budget announcement last year.

Historical Context: A Recurring Political Battleground

The Conservatives’ Previous Stance

The pattern of political opposition to gambling tax rises is not new. In 2025, when Rachel Reeves was Chancellor under a Labour government, Badenoch’s Conservative Party positioned itself as a strong ally of horse racing during similar debates. At that time, Badenoch joined The Sun’s “Save Our Bets” campaign, branding then-Prime Minister Keir Starmer and Chancellor Reeves as the “fun police” turning Britain into a nanny state.

The Gambling Act Review

As party leader, Badenoch has endorsed Shadow Gambling Minister Louie French’s claim that the former Conservative government took a “balanced and business-friendly” approach to the Gambling Act Review. The review, which concluded under the Conservatives, introduced measures such as tighter affordability checks and stake limits, but also sought to protect the licensed sector from excessive regulatory creep.

The Broader Regulatory Climate

Labour’s Approach Since Taking Office

Since coming to power, Labour has imposed a series of tax increases and regulatory tightening on the gambling industry. The stated goals include reducing gambling-related harm and raising revenue for public services. However, critics argue that the cumulative effect is punishing law-abiding operators while doing little to curb black-market activity.

Impact on Horse Racing and Rural Communities

Badenoch and other industry figures have highlighted the detrimental effect on UK horse racing, which relies heavily on betting revenue for prize money and infrastructure. Rural communities, where betting shops often serve as social hubs, are also disproportionately affected.

Key Takeaways: What Happens Next?

The industry is now waiting for Chancellor Healey’s Autumn Budget announcement. If MGD rises, the consequences could be severe:

Meanwhile, the political debate is set to intensify. Badenoch’s intervention ensures that gambling taxation will remain a live issue in the run-up to the next general election.