UK Budget raises Machine Games Duty to 25% on higher-stake machines
Chancellor John Healey raised Machine Games Duty from 20% to 25% for machines with stakes above £1, from April 2027. The rise was smaller than many in the industry had feared.
Key points
- The 25% rate applies to machines with stakes over £1 or prizes over £100, from 1 April 2027.
- The lower rate for £1-or-less machines, common in pubs and arcades, is unchanged.
- A consultation proposes moving MGD liability to machine suppliers in some cases from April 2028.
The UK government has raised Machine Games Duty (MGD) on higher-stake gaming machines from 20% to 25%. Chancellor John Healey announced the change in the Budget on 28 October. It takes effect on 1 April 2027.
According to Deloitte, the higher rate covers machines with stakes above £1 or prizes above £100. Pinsent Masons said the lower rate for machines with stakes of £1 or less stays the same, which protects pubs and seaside arcades. The increase mainly hits betting shops and adult gaming centres.
The Treasury also launched a consultation on who pays the duty. It proposes making machine suppliers liable for MGD on supplier-owned machines run under profit-share deals, from 1 April 2028. The consultation closes on 20 January 2027, according to Deloitte.
Gaming.net reported that the Betting and Gaming Council expressed “deep disappointment”. Citing EY projections, the trade body warned that almost 9,000 jobs could be lost and almost 1,000 betting shops and casinos could close or be at serious risk.
Why it matters
The outcome was milder than some reports had suggested. In the run-up to the Budget, there was speculation that the standard rate could double to 40%. Bryn Reynolds of Pinsent Masons said the 25% rate was “lower than anticipated by many in the industry,” but would still add pressure on operators.
For Gibraltar, the direct effect is limited, because MGD applies to land-based machines in Britain. The indirect effect is real. Groups such as Entain and evoke run large UK retail estates alongside online businesses managed from Gibraltar. Higher retail costs add to the strain from the April 2026 rise in Remote Gaming Duty to 40%. Gaming.net also noted that from April 2027 freeplays will be treated as “restricted plays” under Remote Gaming Duty, a technical change online operators will need to model.
What happens next
Remote betting duty rises from 15% to 25% in April 2027, as set out last year. The MGD rise follows on the same date. Operators now have five months to decide which machines and shops remain viable.
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