After the Chancellor announced a tax hike for the gambling and betting sector, Saskia Koopman dissected the industry reaction

Machine Games Duty (MGD) will rise from 20 to 25 per cent in April 2027, below the 40 per cent demanded by campaigners and some Labour MPs.

The Betting and Gaming Council (BGC) warned that almost 1,000 betting shops and casinos could close or be put at serious risk, 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.”

One industry source told : “It’s a punitive tax raid and a jobs killer. It’s ideology on steroids pushed by donors, campaigners and Gordon Brown.”

Gambling hit by Chancellor

Yet investors welcomed the smaller-than-feared increase, sending shares in Ladbrokes owner Entain up more than six per cent, Rank Group eight per cent higher and William Hill owner Evoke nearly four per cent higher.

The rally reflected relief that the Treasury had rejected a 40 per cent rate, rather than confidence that the industry would avoid further restructuring.

Healey said the tax increase would fund business rates relief, raising the threshold for small retail, hospitality and leisure businesses from £12,000 to £18,000.

But betting shops will face higher costs, while adult gaming centres have been excluded from the relief altogether.

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

That could leave smaller bookmakers facing a tougher squeeze as larger rivals absorb the additional costs and pick up customers from struggling competitors.

The increase follows last year’s decision to raise Remote Gaming Duty on online casino profits to 40 per cent, while General Betting Duty on online sports betting is due to rise to 25 per cent next April.

Closures on the high street?

Evoke disclosed last week that it had closed 270 betting shops over the past year, while Flutter has outlined plans to cut around 1,400 jobs across the UK and Ireland.

Steve Hawkes, Flutter’s chief reputation and external affairs officer, said: “I’m afraid this isn’t a Budget for the worker if you’re one of the thousands employed in a high street bookie.”

The British Horseracing Authority (BHA) also warned that the increase could cost racing £57m annually, citing independent modelling shared with the Treasury ahead of the Budget.

Its chief executive Brant Dunshea said the decision risked the closure of “hundreds, if not thousands” of betting shops, threatening prize money, racecourse finances and jobs across the sport.

“While the MGD rate increase is not as severe as some called for, this change could still prove devastating for the future of our sport,” he said.

Shadow sport minister Louie French warned the increase would damage British racing and push customers towards illegal gambling operators.

Damage for betting

“Cheered on by the Liberal Democrats, the Chancellor has announced a further tax hike on gambling, which will likely damage British racing, jobs, and sponsorship of sports,” he said. “Labour has given up on British racing and rural communities.”

The Social Market Foundation, which had called for the duty to double to 40 per cent, welcomed the increase but questioned whether it would significantly reduce gambling-related harm.

Its chief economist Gideon Salutin described the rise as “relatively limited”.

The Treasury has therefore opted for a smaller revenue-raising measure than campaigners wanted, while leaving operators facing another increase in costs.

The BGC has warned that higher duties could push customers towards unregulated gambling sites, which it estimates already attract £16.6bn in annual stakes, although the scale of any further shift remains uncertain.

Meanwhile, the industry’s forecasts of widespread closures remain contested, with campaigners arguing that higher taxes could offset some of gambling’s wider social costs.