Entain's Dire Warning: A Comprehensive Guide to the Proposed Machine Games Duty Hike

By jili tutorial · September 18, 2026

Entain’s Dire Warning: A Comprehensive Guide to the Proposed Machine Games Duty Hike

Overview: A Tax Increase That Could Reshape the UK Betting Landscape

Entain, the global gambling giant behind Ladbrokes and Coral, has fired a stark warning to the UK government over a proposed doubling of the Machine Games Duty (MGD). In a letter addressed to Prime Minister Andy Burnham, Entain CEO Stella David cautioned that raising the tax from its current rate to 40% could trigger widespread betting shop closures, massive job losses, and—ironically—a net reduction in tax revenues for the Treasury. As the government prepares its Autumn Budget in October, this potential policy move has ignited a heated debate about the future of the high street gambling sector, the unintended consequences of tax hikes, and the growing threat of the black market.

This guide unpacks the details of Entain’s warning, the broader regulatory context, and the potential ripple effects across the industry and local communities.

Background on Machine Games Duty and the Proposed Change

What Is Machine Games Duty?

Machine Games Duty (MGD) is a tax levied on the gross gaming yield (GGY) from gaming machines—such as fixed-odds betting terminals (FOBTs) and other electronic gaming devices—operated in betting shops and adult gaming centres (AGCs) across the UK. It is a distinct tax from the Remote Gaming Duty (RGD) applied to online gambling, though both fall under the broader umbrella of gambling taxation.

Current Rate and the Proposed Doubling

At present, the standard MGD rate stands at 20% of gross gaming yield. The government is reportedly considering doubling this rate to 40%, following a recommendation from the Social Market Foundation in a recent report. This suggestion was first disclosed by The Financial Times, with Chancellor John Healey allegedly exploring the measure as a way to increase government revenue.

If enacted, the increase would represent a sharp jump at a time when the industry is already contending with other tax pressures. Earlier this year, the Remote Gaming Duty was raised to 40% of gross gaming revenue—a move that itself strained operators.

The Regulatory Landscape: More Than Just a Tax

Alongside the potential MGD hike, Prime Minister Andy Burnham has already announced the government’s intention to scrap the “aim to permit” policy for betting shops, a long-standing planning principle that made it easier to open such premises. In addition, AGCs will now be required to obtain full planning permission to operate. These changes signal a broader tightening of the regulatory environment, with the government citing concerns over problem gambling and high street overconcentration.

Entain’s Warning: The Human and Economic Cost

Job Losses and Shop Closures

In her letter, David warned that a MGD increase on top of April’s RGD rise could add approximately £100 million to Entain’s annual operational costs for its retail estate. To put that figure in perspective, it is equivalent to the entire payroll cost of over 2,000 full-time staff at the median UK wage.

Using data commissioned by the Betting and Gaming Council (BGC) and prepared by EY, Entain projected that the tax hike could force the closure of up to 1,470 betting shops—roughly one in every five shops currently operating in the UK. These closures would, in turn, lead to the loss of up to 15,900 jobs across the sector.

A Blow to Vulnerable Communities

David emphasised that the impact would fall hardest on the very communities the government’s “Makerfield Test” is supposed to protect. The Makerfield Test, named after the constituency of Labour MP Yvonne Fovargue, is a principle that policies should not harm low-income workers and struggling high streets.

“They are people losing their jobs and communities losing long-established high-street businesses,” David wrote. She highlighted that half of Entain’s retail employees are women, and more than 50% work flexible or part-time hours. Over 2,500 of its staff members are under 25 years old. For many of these workers, the local betting shop provides a rare source of stable, accessible employment, particularly in areas where good jobs are scarce.

Moreover, the letter argued that the MGD increase could actually cost the Exchequer money rather than generate it. By pushing customers towards unregulated alternatives, the government could see a net decline in tax receipts—a classic example of the Laffer curve applied to gambling taxation.

The Black Market Threat: A Revenue Drain

How Much Could Migrate?

Entain warned that a sharp increase in MGD would accelerate the shift of gambling activity into the unregulated black market. The company estimated that up to £1 billion in gambling stakes could leave the regulated sector. This would not only reduce tax revenue from machines but also erode the broader oversight that protects consumers.

Evidence from Previous Tax Rises

Entain cited analyses from the Office for Budget Responsibility (OBR) showing that past gambling tax increases had reduced expected tax receipts. For instance, the OBR forecast a £500 million reduction in expected receipts for the 2029–30 financial year as a direct consequence of earlier tax changes. This pattern suggests that the Treasury’s own economists recognise the diminishing returns of steep tax hikes in this sector.

Europe’s Growing Black Market

A separate report commissioned by Euromat—and produced by Regulus Partners and Helios— paints an even bleaker picture. It found that Europe’s unlicensed gambling market has sustained a compound annual growth rate of 18% between 2019 and 2026, and is projected to be worth up to €13 billion by the end of this year. A UK tax rise would almost certainly feed this trend, channelling money away from regulated businesses that pay UK taxes and contribute to racing levies and problem gambling charities.

Entain’s Internal Restructuring: Cost-Cutting Amid Headwinds

Customer Care Role Reductions

Alongside its warning on MGD, Entain revealed that it had initiated a consultation process that could lead to the reduction of around 400 customer care roles from its 2,000-strong UK team. According to David, this restructuring is part of a broader effort to streamline operations, increase efficiency, and improve customer experience. The company aims to consolidate its customer support into “centres of excellence” across multiple locations.

“The proposed changes are being made to ensure our business remains competitive, financially resilient and well positioned for the future as our sector faces an increasingly challenging operating environment,” David said. She added that the decision was not made lightly and that the company’s immediate priority is to support affected colleagues through the transition.

Previous Global Job Cuts

Earlier in 2024, Entain announced that it would cut 500 roles globally across its operations and central functions. At the time, the company insisted that the cuts were not a reaction to the earlier increase in Remote Gaming Duty but rather part of a restructuring and cost-cutting exercise driven by new CFO Michael Snape. The statement read: “As part of our ongoing focus on enhancing Entain’s operational efficiency and agility, we have begun implementing organisational changes which will regrettably impact a number of roles across the group over the months ahead.”

Ireland Estate Reduction

In April, Entain reduced its Ladbrokes retail estate in Ireland by over a third, amid reports that it had withdrawn from discussions to sell its entire Ladbrokes retail estate in the market. This move further underscores the mounting pressure on land-based operations.

Industry-Wide Ripple Effects

Bet365 Also Cutting Jobs

Entain is not alone in facing the squeeze. Just last week, Bet365 announced that it would cut more than 300 jobs in response to the UK’s tax increase. This indicates that the entire sector is bracing for a period of contraction, with higher operating costs threatening to strip away thousands of roles across bookmakers.

What This Means for the High Street

Betting shops have long been a staple of British high streets, particularly in economically disadvantaged areas. They provide not only employment but also a social hub and footfall that supports nearby shops and services. The closure of nearly 1,500 shops would leave large gaps in town centres, compounding the challenges already faced by bricks-and-mortar retail.

The Horse Racing Connection

Entain noted that machine gaming revenue plays a vital role in sustaining shops outside of race days. This cross-subsidy helps generate around £50 million annually for British horse racing through the levy and media rights. A collapse in retail margins would inevitably reduce this contribution, hitting an ecosystem that relies on betting revenue.

Next Steps: Entain Seeks Dialogue

In the letter, Entain requested meetings with government officials to present its concerns directly and to facilitate engagement between ministers and frontline shop staff before the final budget decisions are made. The company is hoping that firsthand accounts from workers and shop managers will illustrate the real-world consequences of a tax hike that may look simple on paper but carries devastating human and economic weight.

Conclusion: A Fork in the Road for UK Gambling Policy

The proposed doubling of Machine Games Duty represents one of the most consequential decisions for the UK gambling industry in recent years. If implemented, it could accelerate the decline of high street betting shops, push billions of pounds into the unlicensed sector, and cost the Treasury more than it gains. At the same time, it would place thousands of jobs—many held by women, young people, and part-time workers—at risk.

Whether the government will heed Entain’s warning or proceed with the increase remains to be seen, but the stakes could not be higher for communities, workers, and the long-term health of the regulated market.