Gambling stocks up on hopes of smaller tax rises for sector

By the Editorial Team · Thursday, October 22, 2026

Investors have boosted shares of UK gambling companies after reports suggested the government will raise machine games duty by 5 percentage points instead of the previously feared 20-point increase. This smaller tax hike could help prevent widespread venue closures and job losses that the industry warned would result from a steeper rise.

Investors have driven up gambling company shares amid expectations that the UK government will impose a smaller-than-anticipated tax increase on the sector in the upcoming budget. Market activity surged after reports indicated that the chancellor is likely to raise the machine games duty by 5 percentage points, rather than the 20-point hike previously speculated.

Specifically, the duty on category B machines—which operate in casinos, adult gaming centres, betting shops, bingo halls, and social clubs—is anticipated to rise from 20 percent to 25 percent. This rate was expected to jump to 40 percent following recommendations from the Social Market Foundation, a cross-party think tank that estimated the higher levy could generate up to £458 million in additional revenue.

The gambling industry has strongly opposed the steeper increase, warning that significant tax hikes would accelerate the closure of venues and threaten thousands of jobs. The Betting & Gaming Council estimated that a 40 percent duty could force the closure of up to 2,900 high street betting shops, potentially resulting in the loss of more than 21,000 jobs. The council also emphasized the broader economic impact, projecting a £70 million reduction in contributions to horse racing from levies and media rights.

David Brohan, a gaming analyst at Goodbody, noted that while the 40 percent rise has not been definitively ruled out, current reports suggest a lower increase is more likely and would be viewed positively by the market. Reflecting this sentiment, shares of Entain—the owner of Ladbrokes and Coral—rose by 4.2 percent to close at 453¼ pence. Despite this gain, Entain’s stock has declined roughly 25 percent over the past six months amid ongoing tax-related uncertainties. Similarly, shares of Rank Group, the operator of Mecca Bingo and Grosvenor Casinos, rose 5.1 percent to finish at 80½ pence. Category B machine gaming accounts for approximately £112 million of Rank’s annual revenue, about 30 percent of its total sales.

The sector faces additional financial pressures, having recently absorbed a steep increase in remote gaming duty—from 21 percent to 40 percent—which took effect in April. Furthermore, a forthcoming increase in the general betting duty rate for online bets, from 15 percent to 25 percent, is set to take effect next April, adding to companies’ cost burdens.

These regulatory changes have contributed to recent job cuts across the industry. Flutter Entertainment, which owns Paddy Power and Sky Bet, attributed the elimination of 1,400 positions, or 15 percent of its UK and Ireland workforce, at least partly to higher gambling taxes. Entain has also announced significant layoffs, cutting 500 jobs in July and an additional 400 in its customer care division.

Industry figures continue to urge the government to moderate tax increases. Fred Done, the billionaire founder of Betfred, has called on policymakers including Andy Burnham and John Healey to avoid further taxation that could lead Betfred to shutter nearly 500 high street shops—representing almost half of the company’s locations—should machine games duty rise as proposed.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.