The UK government will raise Machine Games Duty on higher-stakes gambling machines from 20% to 25%, a change that Entain estimates will add about £25 million to its annual costs. The increase was announced by Chancellor John Healey in the Budget on October 28, alongside plans to expand small business rate relief for retail, hospitality and leisure businesses.
The relief threshold will rise from £12,000 to £18,000. Healey said the higher gambling tax would help fund that support while protecting pubs and seaside arcades.
“To pay for this support of our high streets, I'm raising taxes on gambling by increasing Machine Games Duty from 20% to 25% for higher stakes machines, whilst protecting pubs and seaside arcades.”
Which machines are affected?
Category B machines include slots and electronic roulette games found in Adult Gaming Centres, casinos and some pubs. The category covers five machine types, with different stake limits.
Four types — B2, B3, B3A and B4 — have a maximum stake of £2 per play. Before rules changed in April 2019, players could stake up to £100 per spin on these machines. B1 machines have a maximum stake of £5. In large casinos, their number is capped at 150, and venues offering them must maintain a 5:1 ratio relative to other machine categories.
Category C and D machines, commonly found in seaside arcades and pubs, have a maximum stake of £1. Their Machine Games Duty rate remains 15%. Category A machines, which have unlimited stakes and prizes, are not currently permitted in UK venues, but would also face a 25% rate.
Entain warns of further impact
Stella David, CEO of Entain, which owns Coral, Ladbrokes and PartyPoker, said the company was disappointed by the decision. She said previous gambling tax increases announced in November last year had harmed employees, communities and customers, and warned the latest changes could add to that impact and drive more people towards the illegal market.
“We will continue to work hard to limit the impact of these changes on our business, our people, and the communities in which we operate. Our priority is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets.”
Entain said it expects the higher rate to cost the company around £25 million a year.
