UK budget lifts higher-stakes machine duty to 25%

On Wednesday 28 October 2026, UK Chancellor John Healey announced in his budget that Machine Games Duty on higher-stakes machines will rise from 20% to 25%. That is 15 points below the 40% rate floated before the budget.

Healey said he would protect pubs and seaside arcades from the rise, and that Adult Gaming Centres and vape shops would be carved out of business rates relief.

iGaming Business has described the change both as a "5% hike" and as a "25% rate." If "5%" means percentage points, the two coincide: going from 20% to 25% is a rise of five percentage points, which is a 25% increase in the duty itself. On every £100 the duty applies to, the charge goes from £20 to £25, so the operator keeps £75 instead of £80, a 6.25% cut in its retained share. The floated 40% rate would have taken £40 of the same £100, leaving £60 and cutting the retained share by a quarter.

The Social Market Foundation had proposed the same figure in June 2026, calling for the duty to be doubled, from 20% to 40% according to iGB.

According to iGaming Business, the only outlet reporting it, Guido Fawkes published a draft of that June report on the Tuesday before 23 October 2026, apparently by accident, with internal staff comments still attached. Yogonet does not mention the leak. In one margin note, iGB reports, SMF director Theo Bertram asked what grounds there were to expect displaced workers to find jobs elsewhere. Chief economist Gideon Salutin replied that there was no guarantee for individuals but that national employment would grow. iGB also reports that Salutin changed a claim about crime from a causal link, which he called "unclear," to a correlation after Bertram warned against overstating causality.

The same outlet says the draft does not show any figures being invented.

iGB further reports that the SMF estimated the doubling would raise £275 million to £458 million a year, and that the foundation had not responded to its request for comment. Citing City AM, iGB says a Gambling Commission spokesperson said the reported comments "raise serious questions about the evidence being used to justify further tax increases." Industry figures quoted only by iGB went further. Greg Knight of JenningsBet said the SMF "has been totally discredited," and Helen Walton of G.Games said some users of the data "know it's made up."

Before the budget, the Betting and Gaming Council cited EY modelling that doubling the duty would put up to 16,000 jobs at risk and lead to the closure of almost 1,500 betting shops and 34 casinos. In a trading update, Rank Group CEO Richard Harris said any increase would raise costs, reduce venue viability, lead to closures and job losses, and cut tax receipts. He added that tax uncertainty had halted further investment.

Genting Casinos COO Paul Willcock told a panel event in October that Genting was "itching to invest" in the UK, but only with regulatory stability.

Sarah Calakovic, regional manager at Buzz Bingo in Kent, told the BBC that a 5% increase in the duty would put around 40% of its clubs into loss-making territory.

According to Yogonet alone, the BGC warned after the budget that 9,000 people may lose their jobs and 1,000 venues were at risk. The same outlet reports that Salutin welcomed the decision but said the rise was too limited to change industry behaviour. Yogonet also reports that the rise funds an increase in the small business rates relief threshold from £12,000 to £18,000.

The change follows a larger one by Healey's predecessor, Rachel Reeves, who raised Remote Gaming Duty from 21% to 40%, effective April 2026.

The reporting gives no start date for the 25% rate and does not define which machines count as higher-stakes. The budget documents would settle both.