UK Chancellor Reportedly Considers Machine Games Duty Increase

UK Chancellor John Healey is reportedly considering an increase in Machine Games Duty (MGD) as the government examines potential revenue-raising measures ahead of next month's Budget.

According to The Times, Treasury officials are modelling how much additional revenue could be generated through different increases to the tax applied to gaming machines. The discussions follow proposals earlier this year from the Social Market Foundation (SMF) to double the MGD rate on Category B machines from 20% to 40%.

Machine Games Duty Increase Reportedly ‘On The Table’

The Chancellor is preparing to deliver the Budget on 28 October amid pressure to fund cost-of-living measures and increased defence spending through additional taxation or spending reductions.

“Increases in gambling taxes are definitely on the table again,” a government source told The Times.

The source suggested that any changes could include different treatment for certain land-based gambling and hospitality venues, with bingo halls and pubs potentially receiving carve-outs from broader increases.

Former Chancellor Rachel Reeves was also reported to have considered increasing taxes on gaming machines before ultimately introducing higher taxation on remote gambling.

A Treasury spokesperson declined to comment on the speculation, saying: “The chancellor is fully focused on his priorities, to boost business, help with the cost of living and support people in every postcode. As has always been the case, the chancellor will set out decisions at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”

BGC Warns Of Further Betting Shop Closures

The Betting and Gaming Council (BGC) has strongly opposed any increase in MGD, warning that higher taxation could place additional pressure on betting shops, casinos and other land-based gambling businesses.

“We fundamentally oppose any increase in Machine Games Duty. It would put further pressure on betting shops, casinos and other venues, cost jobs and investment, weaken high streets and benefit the growing illegal gambling market,” a BGC spokesperson said.

“By the end of 2026, more than 600 betting shops will have closed and 5,000 jobs will have been lost since the last year’s Budget following increases in Remote Gaming Duty. Doubling tax on a land-based product would lead to more closures, further job losses and damage to the wider ecosystem that supports British racing.”

The retail betting sector has already faced a series of shop closure announcements during 2026, with operators citing a combination of higher taxation, energy and employment costs, economic uncertainty and the continuing migration of customers towards online gambling.

Industry Questions Revenue Impact Of Higher Duty

The speculation follows the increase in Remote Gaming Duty to 40% for online casino activity from April, a change that has increased costs for major operators with both digital and retail businesses.

Attention has also increasingly turned towards Adult Gaming Centres (AGCs), with the government recently outlining plans to move away from the existing “aim-to-permit” approach to licensing.

However, questions remain over how much additional revenue a substantial MGD increase would generate if it resulted in widespread venue closures. Modelling from Regulus Partners has suggested that increases on the scale proposed by the SMF could make a significant proportion of betting shops and AGCs economically unviable.

No changes to Machine Games Duty have been confirmed, with any potential measures expected to become clearer when the Chancellor delivers the Budget on 28 October.