A leaked draft of the Social Market Foundation’s proposal to double UK machine games duty (MGD) to 40% has exposed internal questions about its employment projections and the evidence used to support claims about gambling harm.
The proposal has been backed by Gordon Brown and Alex Ballinger MP. The SMF says gambling harm linked to gaming machines costs £669m a year, compared with £607.5m in tax revenue in 2024-25. It also estimates that a 10% fall in gambling spend, equivalent to £1bn, would create 24,000 jobs as spending shifts to other sectors.
Draft comments question jobs and causation
The draft includes comments from SMF Chief Economist Gideon Salutin and Director Theo Bertram. Bertram questioned whether it was “overly optimistic” to assume people losing jobs would find work elsewhere. Salutin replied: “You’re right, this does not guarantee the employee will find a job elsewhere, but it does show that employment across the country will grow. I believe the wording’s right here.”
The projection contrasts with Flutter’s confirmation of 1,400 job losses attributed to last year’s remote gaming duty (RGD) increase, and warnings across the sector about tax-related job cuts. UK gambling companies have continued to report positive revenue growth, while the article notes that consumers could shift spending online if retail venues close.
Bertram also queried a causal link elsewhere in the report; Salutin said he had changed it to correlation. A graph in the draft shows no correlation between remote gaming tax rates and illegal gambling figures. The report does state a correlation between adult gaming centre density and deprivation across UK local authorities.
It cites a 2014 study that found 37% economic activity in High Density Machine Zones (HDMZs), defined as areas with at least one gambling machine per hectare, compared with 33% in areas without machines. Salutin noted that limiting a tax increase to Category B machines, which are not found in pubs, would affect bingo and seaside arcades, though that point is absent from the report.
Bacta has warned that higher MGD could close such venues as seaside holiday visits are down 18% year on year. Its Director of Communications, Allaster Gair, said: “When businesses cease trading, towns enter a spiral of decline and, not unsurprisingly, become less attractive as a place to holiday. Government must avoid the self-harm that an increase in MGD will cause and, in the process, help support the tourism industry.”
Wider debate over evidence
Reports suggest Andy Burnham and UK Chancellor John Healey are set to increase MGD by 5%, leaving the impact of the SMF’s proposed 40% rate uncertain. The Betting and Gaming Council has cited 16,000 potential job losses and 1,500 betting shop closures if MGD is doubled; the source says neither side’s projections may be testable.
An X post criticised the leak, saying: “Top tip when leading campaign for tax hikes: don’t publish private staff commentary on the faults in your draft… Evidence on gambling ‘harms’ is extremely flimsy.” SMF Senior Fellow James Noyes called it a “non-story”, saying the comments showed “serious people communicating with each other in a professional way” and checking the research’s complexities. He also cautioned that readers cannot know which comments were omitted.
Ballinger’s report foreword links machine gaming to higher welfare payments and says the proposal would raise £450m while boosting productivity and high streets. The Gambling Commission’s Log of Requested Corrections lists him three times for incorrectly describing the Problem Gambling Severity Index (PGSI) as a measure of addiction. After a 5 February 2025 debate, the UKGC also wrote to Ballinger and Jim Shannon over “scaling up problem gambling data to population numbers”.
