Machine Games Duty could double in John Healey’s Autumn Budget announcement

By jili tutorial · September 8, 2026

Explainer: Could Machine Games Duty Double in the UK’s Autumn Budget?

The UK gambling industry is bracing for another prospective tax increase. According to The Times, ministers are examining a plan to double Machine Games Duty (MGD) in the upcoming Autumn Budget. The move is being debated as the government searches for additional funding for defence spending and measures to ease the cost-of-living crisis.

For betting shops, bingo halls, casinos and the wider racing ecosystem, the stakes are enormous. A doubling of MGD could lead to thousands of shop closures, a reduced contribution to horse racing and further pressure on a sector already absorbing recent tax changes.

What is Machine Games Duty?

Machine Games Duty is a UK tax on the profits generated by gaming machines on licensed premises. It applies to machines in betting shops, arcades, bingo clubs, casinos and other venues. The operator pays duty on the machine’s net takings, and the rate depends on the type of machine and the maximum stake or prize available.

The current rates are:

MGD tier	Current rate	If doubled
Lower rate	5%	10%
Standard rate	20%	40%
Higher rate	25%	50%

A simplified example: if a betting shop has a machine in the standard 20% band with £100,000 in net takings, it would currently owe £20,000 in MGD. If the rate doubled to 40%, the tax bill on the same machine would be £40,000. That difference is significant enough to affect staffing, opening hours and even the viability of a site.

What is being proposed?

The Times has reported that Defence Secretary John Healey is considering an increase in MGD, with the Autumn Budget expected to be the vehicle for any change. Healey has been cautious in public on tax rises, but the proposal has become part of a wider conversation about how the government funds its priorities.

Supporters of gambling tax increases have been vocal. Former prime minister Gordon Brown has called for the duty to be hiked to help with rising domestic fuel prices this winter. Other politicians have proposed using additional gambling taxes to support the NHS, grassroots sports and efforts to end child poverty.

Why would a doubling be so damaging?

The most immediate impact would be on land-based gambling venues. Industry analysts told the Racing Post that a doubling of MGD could lead to nearly 3,000 shop closures and reduce the horse racing levy by around £70m.

The horse racing levy is a key source of funding for British racing, drawn from bookmakers’ profits on horse racing bets. When betting shops close, the money flowing into racing falls. That could mean smaller prize funds, fewer opportunities for owners and trainers, and a weakening of the sport’s financial base.

Betting shops are also central to high streets. The Betting and Gaming Council (BGC) has argued that the closures would cost jobs and investment, and damage town centres at a time when the high street is already under strain.

A sector already adjusting to major tax rises

This potential change would come on top of a substantial increase in Remote Gaming Duty (RGD). In last year’s Autumn Budget, then-Chancellor Rachel Reeves announced a near-doubling of RGD from 21% to 40%. The increase was implemented in April.

Reeves also said the government intended to raise General Betting Duty (GBD) from 15% to 25% in April 2027. These changes affect online casinos, sports betting and other forms of remote gambling, and they have already made a visible dent in the financial results of UK-facing PLCs.

Entain, evoke, Flutter Entertainment and FDJ United have all highlighted the impact in their interim results. The tax burden is becoming a recurring theme in investor updates and a drag on profitability.

Could mid-tier operators be wiped out?

There is a growing concern that the cumulative weight of tax rises could force mid-tier operators out of the market. Larger companies can absorb costs more easily, diversify their revenues and use scale to achieve better pricing. Smaller operators, by contrast, have less room to manoeuvre.

If mid-tier firms disappear, the market would skew further towards established giants. That might benefit some shareholders in the short term, but it would reduce competition and may lead to less choice for consumers. It would also make the regulated industry less resilient, as a smaller number of operators control more of the market.

The black market problem

The BGC has consistently warned that tax rises push customers to the illegal market. Unlicensed operators pay no UK taxes and are not required to implement safer gambling safeguards. They offer no dispute resolution, no affordability checks and no protection against problem gambling.

A BGC spokesperson highlighted the risk: “It would put further pressure on betting shops, casinos and other venues, cost jobs and investment, weaken high streets and benefit the growing illegal gambling market.”

The BGC’s warning in full

The BGC also drew attention to the damage already caused by the previous Budget. “By the end of 2026, more than 600 betting shops will have closed and 5,000 jobs will have been lost since last year’s budget following increases in remote gaming duty,” the spokesperson said.

On the proposed MGD doubling, they added: “Doubling tax on a land-based product would lead to more closures, further job losses and damage to the wider ecosystem that supports British racing.”

What happens next?

The final decision will rest with the Chancellor’s Autumn Budget announcement. The Treasury must balance the need for revenue against the risk of harming a sector that supports tens of thousands of jobs and contributes to sports and local economies.

For the gambling industry, the choices are stark. Further tax increases could mean fewer venues, less funding for racing and a larger black market. A more measured approach might deliver some revenue while protecting the fragile economics of land-based gambling. The Autumn Budget will reveal which path the government has chosen.