Casino operator Rank Group has warned that John Healey’s gambling tax hike will deliver a hit of around £9m a year, as the industry begins to count the cost of Wednesday’s Budget.

The London-listed owner of Grosvenor Casinos and Mecca Bingo said the increase in Machine Games Duty (MGD) from 20 to 25 per cent, which takes effect in April 2027, would add approximately £9m to its annual tax bill before any measures to offset the impact.

Rank expects an additional £2m in costs during its current financial year, ending June 2027, but said it remained confident of delivering like-for-like operating profit in line with expectations.

The company said it would provide further details of the Budget’s impact and its plans to mitigate the costs alongside its half-year results on 28 January.

Gambling firms count the cost

Rank’s warning comes a day after gambling stocks rallied on relief that the Chancellor had opted for a smaller tax increase than many in the industry had feared.

Shares in Rank jumped eight per cent on Wednesday, while Ladbrokes owner Entain gained more than six per cent and William Hill owner Evoke rose nearly four per cent.

Campaigners and some Labour MPs had pushed for MGD to rise to 40 per cent, but Healey settled on 25 per cent.

Entain has already estimated that the increase will cost its UK retail business £25m annually before mitigation, although it expects to offset the impact by the end of 2028 through shop closures, cost savings and market share gains.

The Betting and Gaming Council (BGC) warned that almost 1,000 betting shops and casinos could close or face serious financial pressure as a result of the tax changes, citing modelling commissioned from EY.

“This is a deeply damaging decision and a blow to the thousands of workers, businesses and communities who depend on Britain’s regulated betting and gaming industry”, said BGC chief executive Grainne Hurst.

“The Chancellor has ignored repeated warnings about the consequences”.

The increase adds to mounting pressure on high street gambling operators, following last year’s rise in Remote Gaming Duty on online casino profits to 40 per cent.

General Betting Duty on online sports betting is also set to rise to 25 per cent next April.

While the smaller-than-feared MGD increase offered investors some relief, Rank’s latest figures underline the additional costs facing operators as the changes take effect.