UK gambling tax rise adds pressure after Farage Gibraltar talks

Chancellor John Healey has announced a targeted increase in Machine Games Duty, adding another cost challenge for gambling operators already absorbing higher online taxes. The Budget follows talks between Gibraltar minister Nigel Feetham and Reform UK leader Nigel Farage over the consequences of further increases. However, the distinction matters: Wednesday’s announcement targets gaming machines, while Remote Gaming Duty rose from 21% to 40% in April. The measures affect different activities, even where the same group operates both.

What the Budget changes

From 1 April 2027, machines with a maximum charge above £1 or maximum prize above £100 will attract 25% duty. Qualifying lower-stake machines retain the standard rate. This changes the thresholds determining which machines fall into the higher band.

The following sensitivity illustrates the cost for machines currently taxed at 20%. It assumes £100m in annual taxable net takings, unchanged activity and no mitigation.

These are mechanical scenarios, not company forecasts. Entain, evoke and Flutter have retail exposure, but company-specific earnings effects require eligible machine takings and mitigation assumptions. A flat rate would add no incremental machine-tax pressure; either increase would reduce earnings before offsets.

Entain’s latest guidance places its 2026 online EBITDA margin at the lower end of 21–22%. The April 2027 machine change should not be described as directly threatening that earlier-year online target.

Why Gibraltar is lobbying

GBC reported that Feetham met Farage, Robert Jenrick and Andrew Rosindell before the Budget, following wider cross-party engagement.

“I have a responsibility to ensure that Gibraltar’s interests are represented” — Nigel Feetham, quoted by GBC.

Gibraltar-based businesses serving British consumers still need Gambling Commission authorisation. The entity contracting with UK gaming customers must register for Remote Gaming Duty, which applies regardless of its location. Gibraltar licensing therefore provides no exemption or different UK duty rate. The territory’s concern is the effect on its employment, investment and wider economy.

Advertising pressure continues

Separately, the Gambling Reform APPG has backed a petition calling for gambling advertising to be removed from football.

Higher taxes could encourage marketing cuts or intensify competition for customers. Neither outcome establishes that operators have less capacity to self-regulate. Advertising restraint and spending on compliance are different decisions.

Meanwhile, iGB’s analysis cautions against attributing earlier operator declines to April’s tax increase: the cited annual figures end before implementation. Scale may help businesses absorb costs, but the evidence does not yet establish which operators will survive.