Rank Group, the London-listed owner of Grosvenor Casinos and Mecca Bingo, has warned that the gambling tax increase announced in Wednesday's Budget will add roughly £9m to its annual tax liability before any offsetting measures.
The rise in Machine Games Duty (MGD) from 20 to 25 per cent, which takes effect in April 2027, is expected to cost the company about £9m per year. Rank also anticipates an additional £2m in costs during its current financial year, ending June 2027, but said it remained confident of delivering like-for-like operating profit in line with forecasts.
Budget impact and mitigation plans
The company said it would set out further details of the Budget's impact and its mitigation plans alongside its half-year results on 28 January.
Rank's warning came a day after gambling stocks surged on relief that the Chancellor had chosen a more modest tax rise than much of the industry had anticipated. Shares in Rank leapt eight per cent on Wednesday, while Ladbrokes owner Entain gained more than six per cent and William Hill owner Evoke climbed nearly four per cent.
Industry reaction and wider impact
Campaigners and a number of Labour MPs had pressed for MGD to be raised to 40 per cent, but the Chancellor settled on 25 per cent. Entain has already estimated that the increase will cost its UK retail operation £25m annually before mitigation, though it expects to offset the impact by the end of 2028 through shop closures, cost reductions and market share gains.
The Betting and Gaming Council (BGC) cautioned that nearly 1,000 betting shops and casinos could shut down or face severe financial strain as a consequence of the tax changes, drawing on 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".
The rise heaps further pressure on high street gambling operators, coming hot on the heels of last year's increase in Remote Gaming Duty on online casino profits to 40 per cent. General Betting Duty on online sports betting is also due to climb to 25 per cent next April. While the smaller-than-anticipated MGD increase offered investors a degree of reassurance, Rank's latest figures highlight the mounting costs facing operators as the changes come into force.
