High tax rate on machine games in the UK arrives in 2027

The UK Budget has made a significant change to the Machine Games Duty. A 25% high rate will apply to Category B machines from April 2027. The change will cover bingo halls, betting shops and casinos, while pubs and seaside arcades will remain at the lower rate.

The change concerns the threshold at which the high rate applies. Today, only machines costing more than 5 pounds per play are subject to the high rate. From April 2027, machines with a maximum stake above 1 pound or a maximum prize above 100 pounds will also fall within its scope. The legislation will take effect through the 2026-27 Finance Act.

A new phase is also starting regarding who will bear the tax liability. From 1 April 2028, suppliers will be responsible for machines operated under revenue-sharing agreements. Operators who fully own their machines will keep their responsibility. The government estimates that these two changes will raise an additional 135 million pounds in 2027/28 and 150 million pounds in 2028/29.

Entain has announced that its retail costs in the UK and Ireland will rise by about 25 million pounds a year. The company aims to cover the full amount by 2028 through reducing the number of venues, group-wide savings and market share growth. Entain's shares rose 4.68% after the tax news. The increase was lower than expected, and investors responded positively.

Industry representatives have reacted far more strongly. Grainne Hurst, director general of the Betting and Gaming Council, described the decision as "deeply harmful". According to the Council's modelling, the new rate threatens around 9,000 jobs, and about 1,000 betting shops and casinos face the risk of closure or serious financial damage. Regulus Partners predicts that half of the betting shops in Britain could close within four years, and that the horse racing sector could lose 57 million pounds.