Bacta: MGD adjustments will not save seaside arcades

Bacta said that Chancellor John Healey's efforts in the autumn budget to shield pubs and seaside amusement arcades from the Machine Games Duty (MGD) increase do not fully reflect how seaside businesses actually operate. According to the association, the MGD rise only affects high-value B category machines. However, traditional seaside arcades depend on income from these high-margin machines to sustain their overall operations.

Along with the budget, the MGD rate was raised from 20 to 25 percent. Before this, the Social Market Foundation (SMF) had published a policy paper in June proposing that the rate be raised to 40 percent and that a new tax band be created for B category machines only. In addition, 90 Labour MPs signed a letter urging the chancellor to support the increase. Bacta said that if these proposals were implemented, seaside amusements would come to an end and thousands of jobs would be lost.

The government announced that it is keeping the existing rate for low-stakes machines in pubs and seaside arcades. Under this, the rate for D category machines, with stakes of up to 20p and prizes of up to £10, will remain at 5 percent. For C category machines, commonly found in pubs, which offer stakes of up to £1 and prizes of up to £100, the rate will be held at 20 percent. Bacta said that although the increase was smaller than expected, it found the rise extremely disappointing.