Mixed Reaction as MGD Hiked By 5% in Autumn Budget

It was the worst-kept secret of the government’s Autumn Budget.

Machine Games Duty (MGD) was increased by 5% in the Chancellor’s announcement this lunchtime; taking the tax paid on the machines to 25% in total.

In one sense, that was good news for the UK gambling industry, given fears that John Healey was thought to be plotting a hike up to 40%.

However, the mood has been less than celebratory for the most part, with the 5% duty still enough to significantly cut revenues, which in turn may lead to further betting shop closures and redundancies – as well as millions wiped from the coffers of British horse racing.

Not Good News, Just ‘Less Bad’

Industry analysts have been debating over the exact figures, but one thing they all agree on is that a 25% rate of MGD will lead to more venues closing their doors permanently – specifically high street betting shops, bingo halls and casinos.

The idea on the part of Healey and the Prime Minister was to seemingly make it more challenging for Adult Gaming Centres, which Andy Burnham has confessed to detesting, to thrive. As well as having to pay more duty, the AGCs have also been carved out of the business rates relief package revealed by the Chancellor.

But in hiking MGD, more beloved venues in local towns and cities will also feel the pinch… even if Healey, curiously, was so keen to protect arcades and penny slots by the coast.

“To pay for this support for our high streets, I'm raising taxes on gambling by increasing machine games duty from 20 per cent to 25 per cent for higher stakes machines, whilst protecting pubs and seaside arcades.”

Did Operators Get Off Lightly?

There was no good news emanating from the Autumn Budget, just ‘less bad’ news than feared. Entain’s share price rose from £450.10 at the start of trading this morning to £484.30 by the end of the Chancellor’s briefing.

Elsewhere, the Rank Group saw their value rise 8% over the course of just a few hours – perhaps an indication that institutional investors feel the sector got off lightly.

But for those betting shop and casino employees that may find themselves out of a job in the months ahead, that will come as little cause for comfort.

Horse Racing to Feel the Impact

It’s the second Autumn Budget in a row that the gambling industry has been used to raise funds for government spending.

Remote Gaming Duty, paid on online casino games, was nearly doubled from 21% to 40%, while in April of next year General Betting Duty will increase from 15% to 25%.

Add into the mix the MGD hike, and the financial viability of retail gambling in particular is set to face further scrutiny – estimates suggest more than 500 betting shops have closed in the UK since the 2025 budget, with more than 2,000 jobs either lost or potentially being made redundant.

All of which is very bad news for British horse racing, which for many years has been propped up the betting sector.

Lose-Lose Situation

Market analysis suggests that the forecast shop closures could see as much as £57 million lost from the sport’s finances over the next year, with levy payments and media rights deals disappearing.

The shadow chancellor, Louie French, commented: “The Chancellor has announced a further tax hike on gambling, which will likely damage British racing, jobs, and sponsorship of sports.

“The Treasury were warned that their tax hikes will only serve to fuel the illegal black market, which is a lose-lose for consumers, government and sport. Labour has given up on British racing and rural communities.”