John Healey, Chancellor of the Exchequer, is reportedly considering raising the tax on high-stakes slot machines as part of his upcoming Budget. Insiders suggest that any increase in the machine gaming duty would be carefully targeted to avoid impacting traditional venues such as pubs, bingo halls, and seaside arcades.
Officials are exploring ways to increase the tax specifically on machines located in betting shops and adult gaming centres (AGCs), which typically operate 24 hours a day. This approach aims to address concerns that these venues have negatively affected high streets and contributed to gambling-related harm. Prime Minister Andy Burnham has expressed particular interest in tackling the issue, with one Labour official stating that Burnham "really cares about" the problem.
The move comes amid pressure from former Labour Prime Minister Gordon Brown, who has urged Healey to take action in the forthcoming Budget. However, the gambling industry is mounting strong opposition, warning that higher taxes could force the closure of hundreds of betting shops and lead to thousands of job losses in a sector already strained by significant tax increases introduced last year.
Last year’s Budget, led by then-Chancellor Rachel Reeves, implemented substantial new levies on gambling but stopped short of heavily taxing machine gaming across the board due to concerns that such measures would hurt traditional venues. Industry representatives argued that increased levies could jeopardize pubs and seaside arcades, where lower-stakes fruit machines contribute significantly to revenues. Emma McClarkin, chief executive of the British Beer and Pubs Association, emphasized the importance of slot machines to pubs’ financial health, noting that these establishments are already burdened by numerous taxes.
According to a June report by the Social Market Foundation, a cross-party think tank, doubling the levy on Category B machines—which are higher-stakes and restricted to licensed venues such as betting shops, AGCs, and casinos—could generate additional tax revenue of up to £458 million annually. This proposal would exempt the lower-stakes machines commonly found in pubs and seaside arcades.
Conversely, industry analysis commissioned by the Betting and Gaming Council warns of severe consequences. Research by EY projects that a tax increase of this magnitude could lead to the closure of as many as 1,470 betting shops and the loss of around 15,900 jobs. Stella David, chief executive of Entain, owner of Ladbrokes, wrote to Burnham expressing concerns that implementing the Social Market Foundation’s recommendations could cost her company roughly £100 million and strain businesses already grappling with prior tax hikes. Richard Harris, chief executive of Rank Group, which operates Grosvenor Casinos and Mecca Bingo, dismissed accusations of scaremongering but highlighted that more than 500 betting shops had already closed since November.
The government’s interest in curbing the influence of AGCs and revitalizing high streets comes amid broader economic pressures. This week, government borrowing costs surpassed 5.4%, their highest level since 2007, amid a global bond market sell-off triggered by geopolitical tensions related to the Iran conflict.
The Treasury declined to comment on the Budget deliberations, maintaining that Healey is focused on balancing tax policy to protect traditional leisure venues while addressing concerns related to adult gaming centres.