Machine Games Duty: Budget pulls Category B machines into 25% rate from April 2027

Bingo halls, betting shops and casinos will pay Machine Games Duty’s higher rate on their Category B machines from April 2027, after the UK Budget lowered the threshold for it. A separate shift of liability onto suppliers from April 2028 is now out to consultation.

The Budget leaves the three-rate structure of Machine Games Duty in place. What it changes is the point where the top rate begins. At present, the 25% higher rate applies only to machines costing more than £5 to play. The 20% standard rate covers machines costing 21p to £5. From April 2027, a maximum charge above £1 or a maximum prize above £100 will be enough to trigger the higher rate.

In practice, bingo halls, betting shops and casinos will now pay that higher rate on their Category B machines. Pubs and seaside arcades keep the lower rate. The legislation will be carried in the Finance Bill 2026-27.

Suppliers will pay on profit-share machines from 2028

The second change shifts who pays. Under current HMRC guidance, suppliers are not liable for the duty, even when they share in the takings. The person responsible for the premises registers and pays instead.

From 1 April 2028, suppliers will be liable on machines they own that run under profit-share deals. Premises operators stay liable where they own a machine outright. The same applies where they rent or lease it on fixed terms and control the takings. Combined with the higher rate, the switch is expected to bring in an extra £135 million in 2027/28, rising to £150 million in 2028/29.

Operators count the cost as shares rise

Entain said the rise would add about £25m a year to its UK and Ireland retail costs before mitigation, based on consensus forecasts for FY27 retail net gaming revenue. The group expects to cover the full cost by the end of 2028. It plans to do so through estate rationalisation, group-wide savings and possible market share gains. Its FY26 guidance and its target of £500m annual adjusted cash flow in 2028 are unchanged.

Investors took the outcome as better than feared, because the rise was smaller than some had expected. After the announcement, Entain shares traded 4.68% higher at 473.90p. Rank Group rose 8.75% to 85.80p, and evoke gained 3.77% to 44.62p.

The trade body was far less relieved. Betting and Gaming Council chief executive Grainne Hurst called the rise a “deeply damaging decision” and said the Chancellor had ignored repeated warnings. The council cited modelling suggesting the new rate could cost nearly 9,000 jobs. The same modelling pointed to about 1,000 betting shops and casinos closing or being seriously threatened.

Racing also stands to lose. Regulus Partners estimated the higher rate could close half of Britain’s betting shops over four years and cost racing £57 million in levy and media rights income.

The machine changes are not the only pressure on land-based venues. Adult gaming centres lose business rates relief. This is also the second Budget in a row to raise gambling taxes. In November 2025, remote gaming duty was raised from 21% to 40% from April 2026.

The next step is HMRC’s consultation on supplier liability, which closes at 11:59pm on 20 January 2027. It does not seek views on duty rates or on stake and prize limits.