Labour MPs call for increased tax on Category B machines
Led by Alex Ballinger, a group of Labour MPs has written to the UK Chancellor John Healey calling for a higher rate of machine games duty (MGD) for Category B gambling machines.
Sent to Healey on Friday, the letter comes amid speculation the chancellor will announce tax increases for UK land-based casinos in the Autumn Budget on 28 October.
The letter argued higher-harm gambling products should face higher taxation, following the UK government’s decision last year to increase remote gaming duty (RGD) on online gambling from 21% to 40%, which came into effect on 1 April this year.
Ballinger’s letter called for an increased tax rate on Category B machines, and specifically B3 machines found in Adult Gaming Centres.
The speculation of an increased tax burden for land-based venues followed a report from the Social Market Foundation, a think tank, which urged the government to raise MGD on higher-risk Category B machines.
A ‘popular, targeted and proportionate’ measure
The MP’s letter claimed the increase in MGD would prove to be a “popular, targeted and proportionate” measure to raise revenue.
Additionally, it also claimed the tax rise would protect the wider land-based leisure and hospitality sectors, with pubs unaffected by the rise as they can’t offer Category B machines.
The letter cited polling from the Social Market Foundation, which found 43% of voters support measures to increase taxes on slot machines in high street betting shops.
Industry lobbying efforts intensifying
But with the Autumn Budget now just over a week away, the land-based sector is hitting back against the proposals.
In response to the letter, Betting and Gaming Council CEO Grainne Hurst described the proposed tax rise as “deeply misguided”, pointing to studies that showed a rise in MGD to 40% could cost up to 16,000 jobs and close almost 1,500 betting shops and 34 casinos.
“MPs calling for higher taxes should consider the consequences for the very communities they say they want to protect,” Hurst said. “Every closure means another empty shopfront, fewer jobs and another blow to Britain’s high streets.”
At a panel in the Hippodrome Casino last week, several leading figures from the UK casino sector urged the government to reconsider the proposals.
Regulus Partners’ Dan Waugh criticised the influence of think tanks and lobbyists in shaping gambling policy, saying: “Frankly, a think tank with somewhat murky funding telling the government that gaming is this terrible thing is sort of irrelevant because they’re not the ones going to the casinos.
“It’s not their lives that are being affected by this, so I think the critical thing for me for government is [to] understand the consumer’s perspective on this, sort of shut out the noise from all the lobbyists who are arguing off in their own vested interests.”
Paul Willcock, COO of Genting Casinos, highlighted the impact of tax uncertainty on companies’ willingness to invest in the UK market.
“If we can get some relaxation or at least certainty on that, then investment will flow,” Willcock said.
Rank set to be particularly affected
An analysis by Deutsche Bank last month found that Rank Group was the operator most likely to suffer from an increase in MGD, due to it having the most extensive retail presence.
In a trading update last week, Rank reported a 5% increase in like-for-like NGR for the first quarter of its 2026/27 financial year.
But CEO Richard Harris highlighted the risk of a potential forthcoming doubling of MGD, saying: “Any increase to Machine Games Duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment.”
That echoed his comments at the Hippodrome Casino last week, when he said: “I wouldn’t underestimate the importance of confidence in giving us the ability to kind of really back investment into our business.
“Without confidence, things climb to a halt quite quickly. And just speculation about higher taxation actually brings investment to a halt. So that confidence is so critical to get things moving.”