Key Points
- A prominent UK think tank is urging the government to increase Machine Games Duty on Category B electronic gaming machines beyond the existing 20% threshold.
- Increasing the tax rate to 40% could generate annual revenues ranging from £275 million to £458 million, based on SMF calculations.
- Category B machines are associated with elevated problem gambling rates, with 26.5% of users at casinos showing signs of gambling addiction.
- The Betting and Gaming Council strongly opposes the measure, cautioning it would eliminate tens of thousands of positions.
- Industry analysts from Regulus Partners forecast that up to 70% of betting establishments and 90% of adult gaming facilities could shut down following such a tax adjustment.
The Social Market Foundation is pushing Britain’s government to implement higher taxation on gaming machines considered particularly risky. The organization released its findings this week, timed to precede the upcoming budget announcement.
The initiative specifically addresses Category B electronic gaming machines, which are commonly installed in betting establishments and adult gaming facilities throughout Britain.
Machine Games Duty currently operates at a uniform 20% rate. The SMF advocates for establishing a separate tax bracket exclusively for Category B equipment, positioned at a higher percentage.
Category C and D machines would remain unchanged at their present rates of 20% and 5% respectively. The recommendations concentrate solely on the highest-risk category.
Gambling Addiction and Economic Deprivation
Data compiled by the Gambling Commission indicates Category B machines demonstrate significantly elevated problem gambling levels. Research shows 26.5% of individuals using casino machines registered as problem gamblers according to standard assessment criteria.
This figure substantially exceeds the 4.5% average observed across all forms of gambling. Users of fruit and slot machines also exhibited concerning rates at 16.9%.
Adult gaming facilities account for 42% of these machines throughout Great Britain. Their revenues expanded by 11% compared to the previous year, reaching approximately £623 million during the 2023-24 period.
Research reveals these establishments concentrate heavily in economically disadvantaged communities. Almost half of all licensed facilities operate within the most deprived 20% of regions nationwide.
The SMF calculates the total economic burden of machine-related harm at £2.33 billion annually. This figure encompasses £669 million in direct expenses related to welfare programs, housing support, criminal justice, and healthcare services.
Should the rate increase to 40%—mirroring last year’s Remote Gaming Duty adjustment—annual revenues could reach between £275 million and £458 million. Each additional five-percentage-point increment could contribute £51 million to £114 million.
Sector Opposition
The Betting and Gaming Council dismissed the proposal outright. A representative stated the organization stands firmly against any tax rate elevation.
The BGC emphasized that betting shops, bingo venues, and working men’s clubs provide essential community services. The organization argued that elevated taxation would trigger widespread closures and substantial employment losses.
The council previously calculated that the most recent tax increase could extract £3.1 billion from the broader economy. Projections suggested approximately 40,000 positions could be eliminated throughout the gambling industry.
Consulting firm Regulus Partners released independent projections. The analysis predicted 70% of Britain’s 5,500 betting shops might cease operations under the proposed taxation structure.
The firm also anticipates 90% of adult gaming facilities closing permanently. This translates to roughly 1,300 of the existing 1,450 centers shutting their doors.
Regulus calculated betting shop revenues would plummet from £1.2 billion to £600 million. Adult gaming center revenues would similarly collapse from £550 million to £115 million.
The consultancy warned that as many as 43,000 industry positions could disappear. Additionally, the horseracing sector could forfeit £100 million through reduced media rights and levy contributions.
Regulus projected that half the lost machine revenue would migrate toward illegal gambling operations. The SMF contests this assertion, referencing international evidence that fails to establish a definitive correlation between taxation levels and illicit market expansion.
Public opinion surveys conducted in April 2026 revealed 43% of respondents favor increasing taxes on machine gambling. Just 11% preferred reducing the current rate.
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