BREAKING: Budget Raises Machine Games Duty to 25%

The Budget confirms a five percentage point increase for higher-stakes machines, while adult gaming centres will be excluded from business rates support.

Machine Games Duty will rise from 20 per cent to 25 per cent under measures announced in the Autumn Budget, placing a greater tax burden on parts of Britain’s land-based gambling sector to help fund high street business rates relief.

Chancellor John Healey confirmed the increase in the House of Commons on Wednesday, 28 October, following months of speculation. Reports ahead of the Budget had suggested Machine Games Duty would rise to 25 per cent, the smaller of the two increases under discussion.

The higher rate will apply to Category B machines in casinos, betting shops and bingo venues. Pubs and seaside arcades will be protected from the increase.

The announcement also draws a distinction between the businesses funding the relief and those eligible to receive it. Adult gaming centres, alongside vape shops, will be excluded from the business rates support.

Setting out the measures, Healey said he was raising gambling taxes "to support good growth on every high street."

He told MPs:

"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.

"I will carve out adult gaming centres and vape shops from business rates reliefs and extend the Business Rates Transitional Relief supplement for another two years."

The increase received support from the Social Market Foundation, although the think tank questioned whether the scale of the change would be sufficient to influence industry behaviour.

Gideon Salutin, Chief Economist at Social Market Foundation, said:

“We're pleased the government has chosen to raise tax on Machine Games Duty, reflecting the higher harm associated with this form of gambling. This in combination with other tax measures will deliver government with funding it needs to help meet the high public costs associated with machine gaming, which we see in increases to crime, healthcare, and housing costs. However, today's rise is relatively limited, and we are sceptical that such a small rise to MGD will have significant impact on industry behaviour.”

For affected operators, the Budget brings clarity over the new rate after a prolonged period of uncertainty. It also leaves adult gaming centres facing a further challenge through their exclusion from the business rates relief the wider package is intended to support.