Which machines will pay more
Machine Games Duty is the tax on what gaming machines take in, minus the prizes they pay out. It has three rates: 5%, 20% and 25%, depending on the type of machine. Today a machine that does not qualify for the 5% rate pays the middle rate of 20% if a game costs up to £5.[1][2]
From 1 April 2027 that middle band gets narrower. A machine that costs more than £1 a play, or offers a top prize of more than £100, will pay 25%. Machines that cost up to 20p a play and pay prizes of up to £10 stay at 5%.[1][2]
HM Revenue and Customs says higher-stake machines are more associated with gambling harm. It expects about 5,100 businesses, with around 12,400 premises, to pay more, particularly adult gaming centres, bingo halls, betting shops and casinos. The rise is expected to raise £135 million in 2027-28 and £130 million a year from then until 2031-32.[3]
That estimate assumes operators will pass on part of the rise by paying out less to players. It also assumes that a quarter of the money players stop staking on machines will move to online gaming.[4]
Who will pay it
A second change moves the bill for some machines from the venue to the supplier. From 1 April 2028, suppliers will pay the duty on machines they own that venues operate under profit-share deals. Venues stay liable where they own a machine, or rent it for a fixed fee and control the takings.[1][5]
HMRC counts about 14,900 registrations for the duty, and about 13,500 of them, or 89%, are pubs and clubs. Many have only one or two machines. A consultation on the details is open until 20 January 2027. The Treasury expects the change to bring in £20 million in 2028-29, falling to £10 million by 2031-32, through better compliance and fewer late payments.[4][5]
From April 2027, adult gaming centres in England also lose the lower business-rates multipliers meant for retail, hospitality and leisure properties. Together with a similar change for vape shops, that is expected to raise £10 million a year.[4]
Online rates stay as set
The Budget sets no new rates for online gambling. UK gambling tax on online casino games stays at 40% of profits. The tax on online fixed-odds bets rises from 15% to 25% in April 2027, a rise set before this Budget, while bets on UK horse racing stay at 15%.[2][7]
From April 2027 the online gaming tax, Remote Gaming Duty, also gets new wording on free plays, prizes and tournaments, to put their tax treatment "beyond doubt". Free plays will be called "restricted plays". The gross gaming yield bands for Gaming Duty, a separate tax, are frozen for 2027-28.[1]
First reaction
Entain said on 28 October that the machine-duty rise would add about £25 million a year to the costs of its betting shops in the UK and Ireland, before mitigating action. It expects to make that up by the end of 2028, by closing some shops, cutting costs across the group and possibly winning market share. Its chief executive, Stella David, called it "another disappointing decision by the Government".[6] Before the Budget, Entain and the Rank Group had warned against further gambling tax rises.
Sources
- HM Revenue and Customs (United Kingdom) — Budget 2026: overview of tax legislation and rates (OOTLAR) (28 October 2026, English). The Machine Games Duty rise and its thresholds, the change in who pays, the Remote Gaming Duty changes on free plays, prizes and tournaments, and the Gaming Duty bands.
- HM Revenue and Customs (United Kingdom) — Annex A: rates and allowances (28 October 2026, English). Gambling duty rates for 2026-27 and 2027-28, and the machine types.
- HM Revenue and Customs (United Kingdom) — Machine Games Duty: increasing the rate on higher stake and prize machines (tax information and impact note, 29 October 2026, English). The aim of the change, the businesses and premises affected, and the expected revenue.
- HM Treasury (United Kingdom) — Budget 2026: policy costings (PDF, 28 October 2026, English). The assumptions behind the machine-duty estimate, the costing of the change in who pays, and the business-rates change for adult gaming centres.
- HM Revenue and Customs (United Kingdom) — Machine Games Duty: changing who is liable for the duty (consultation, 28 October 2026 to 20 January 2027, English). The number of registrations, the share of pubs and clubs, and the liability rules.
- Entain plc — Statement regarding UK gambling tax increases (regulatory announcement, 28 October 2026, via Investegate, English). The cost estimate, the plan to offset it and the chief executive's statement.
- HM Revenue and Customs (United Kingdom) — Gambling duty changes (policy paper, English). The new remote betting rate from 1 April 2027 and its exceptions, set before Budget 2026.
