UK Treasury considers 40% duty rate for land-based gambling machines

The Treasury is reportedly considering another increase in gambling taxes, with land-based slot machines potentially targeted in the October Budget.

The move would follow substantial rises for online gambling announced last year. Remote Gaming Duty increased from 21% to 40% in April 2026, while the duty applied to most online sports betting is due to rise from 15% to 25% in April 2027.

Retail betting, casinos and gaming machines were largely spared from those changes. However, reports suggest Chancellor John Healey is now examining whether higher Machine Games Duty could help close a gap in the public finances.

Treasury models higher machine duty

According to The Times, Treasury officials are modelling the revenue that could be raised through different increases to Machine Games Duty. One government source reportedly said:

“Increases in gambling taxes are definitely on the table again.” - A reported government source

MGD is charged on the net takings from machines offering cash prizes, including slots, fruit machines, electronic roulette and fixed-odds betting terminals.

The current system has three bands. Machines costing no more than 20p to play, with prizes of £10 or less, attract a 5% rate. The standard rate is 20%, while machines costing more than £5 to play are taxed at 25%.

One option reportedly under consideration is increasing duty on some machines to 40%. Estimates cited by The Times suggest the change could generate as much as £458 million, although no final decision has been announced.

Casinos and AGCs could face higher costs

A higher rate could affect machines in casinos, betting shops, adult gaming centres and other land-based gambling venues. Pubs and bingo halls may receive exemptions, although the final scope would not be known until the Budget.

The proposal follows political concern about the growth of AGCs on high streets, particularly in deprived areas. Prime Minister Andy Burnham has previously criticised the prevalence of gambling premises and supported giving councils greater powers over new applications.

For operators, however, the timing is difficult. Retail gambling businesses are already managing higher employment and operating costs, declining footfall and continued movement towards online play.

The Betting and Gaming Council has warned that another tax increase could put jobs, investment and high-street businesses at risk. Operators may respond by reducing machine numbers, closing unprofitable venues or cutting other costs.

Treasury faces questions over likely yield

The proposal would bring the tax treatment of some land-based machines closer to the 40% rate now applied to remote gaming. However, the two parts of the market have different cost structures, with physical operators also paying for premises and staff.

Any revenue estimate will therefore depend on how businesses react. Venue closures or machine reductions could limit the amount raised, while the industry is also likely to repeat warnings that higher regulated-market costs can encourage play with unlicensed operators.

The Treasury has not confirmed that MGD will rise. A decision is expected as part of the October Budget, leaving retail operators facing uncertainty after last year’s online gambling tax changes.