Chancellor of the Exchequer John Healey has confirmed an increase in taxes on gambling machines, with Machine Games Duty (MGD) set to rise from 20% to 25% for higher stakes machines. The change was announced in today's Budget (Wednesday, October 28), alongside confirmation that adult gaming centres and vape shops will be carved out from business rates relief.
There had been speculation that the duty could rise by as much as 20 percentage points, to 40%. The move follows a letter co-signed by 90 Labour MPs calling on the Chancellor to raise MGD on Category B machines, which give cash prizes such as slot, fruit and quiz machines.
Protecting pubs and seaside arcades
Mr Healey said pubs and seaside arcades are protected, stating: "I've made my choice at this Budget: asking a bit more of our banks to support ordinary people, raising taxes on gambling to support good growth on every high street."
The Chancellor also announced an increase in the threshold for small business rates relief for retail, hospitality and leisure businesses from £12,000 to £18,000. He said this means "for 70,000 more businesses I'm not just cutting their rates, I'm taking them out of paying business rates altogether – meaning half of our shops, restaurants and gyms will now pay no business rates at all."
"For all other businesses in these sectors, I will freeze their rates in real terms so that none face an above-inflation rise for two years," he added.
Industry reaction to the rise
Despite the rise being less than feared, senior figures criticised the move. Rank CEO Richard Harris emphasised that "any increase to machine games duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment".
Sarah Calakovic, regional manager at Buzz Bingo in Medway, Kent, told BBC South East a 5% rise could "put 40% of our clubs into loss-making territory". Greg Knight, CEO of UK retail operator JenningsBet, said: "I certainly don't think it's a win. It could be an awful lot worse, couldn't it? But I'm not celebrating because at the end of the day it's still going to be a big drain on the industry."
Funding high street support
Mr Healey said the duty changes would pay for support for high streets, with policies including various business rates support for high street businesses. He also said adult gaming centres and vape shops would not qualify for business rates relief, and that the business rates Transitional Relief Supplement would be extended for a further two years.
He added that requirements for online marketplaces would be strengthened "so that sellers cannot avoid paying VAT when they sell online". The Chancellor also announced a £10 million alcohol duty relief for about 2,000 smaller British brewers and cider makers, saying: "Breathing space now, fresh hope for the future, delivered to the British people by this Labour government."
