UK machine tax rise: a 5-point gain?

The autumn budget that UK Chancellor John Healey will announce on Wednesday is expected to settle the future of the high street betting and gaming sector. The long-discussed rise in Machine Games Duty (MGD) is expected to take effect in some form on Category B gaming machines.

The Social Market Foundation think tank proposed in June raising the tax rate from 20 percent to 40 percent. According to the group, this step could raise between 275 and 458 million pounds. The industry reacted strongly to the proposal. Sector representatives warned that around 16,000 jobs, 1,500 betting shops and 34 casinos could be at risk.

According to a Times report, the government has now settled on a smaller rise of 5 percent. Part of the sector sees this as relief. However, Greg Knight, managing director of JenningsBet, says it is not a gain. Knight states that businesses will still face a serious financial burden.

Legal adviser Simon Zinger takes a similar view. In his opinion, any additional tax has the opposite effect given current conditions. According to finance adviser Andrew Bowden's calculations, if no shops close, the Treasury would collect around 120 million pounds in tax. However, each betting shop closure leads to a tax loss of about 155,000 pounds, and 280 closures would wipe out the entire net gain from betting shops.