UK slot machine tax proposal draws competing forecasts for shops and jobs

Chancellor John Healey is considering a rise in UK tax on high-street slot machines ahead of his first budget, The Guardian reported on 2 October. The reported change could affect betting shops, casinos and gaming centres, but no government decision has been established. Industry forecasts warn of closures and job losses; supporters of a rise forecast more tax revenue.

The proposal discussed would raise Machine Games Duty, or MGD, from 20% to 40%. That is a possible change, not an announced rate. It has produced sharply different estimates of what would happen to shops, workers and the Treasury, with each side relying on forecasts rather than observed effects of this proposed increase.

What a 40% Machine Games Duty rate could raise

The Social Market Foundation, a thinktank advocating a higher duty, estimates that a rise to 40% could bring in between £275 million and £460 million more each year, according to The Guardian. The paper reported that MGD raised roughly £610 million in the previous year. The projected extra revenue should be read as the foundation's estimate, not as money already secured by the Treasury.

The foundation's argument also concerns the effects of machine gambling beyond tax receipts. Its proposal comes amid concern about the growth of adult gaming centres: premises with large numbers of machines, including venues open around the clock. The Guardian reported that takings at such centres rose from £528 million to £613 million last year as operators added machines. A higher duty's effect on these premises remains uncertain.

Why betting firms warn of closures and job losses

The Betting and Gaming Council, an industry trade body, launched its Back Our Betting Shops campaign on 28 September. Citing modelling by EY, it said a 40% MGD rate could put up to 16,000 jobs, nearly 1,500 betting shops and as many as 34 casinos at risk. It also projected that the Treasury could be £124 million worse off. These are the council's warnings about a possible change, not closures or losses that have happened.

The Guardian gave the EY estimates in more precise terms: as many as 1,470 betting shops could close, nearly a third of the 5,617 shops in the total it cited, with 15,900 jobs lost and a net Exchequer loss of about £120 million. The figures are close to the council's rounded campaign numbers. Their apparent precision does not remove the uncertainty inherent in predicting customers' and businesses' response to a future tax rate.

Individual operators have made further warnings. Betfred owner Fred Done estimated that his company might close about 495 shops, almost half its estate, with 2,475 jobs and £67 million in tax revenue lost if the change went ahead, The Guardian reported. Entain told Andy Burnham it would need to cut jobs across its 2,300-shop estate. Rank Group warned that a third of its venues could close, affecting 2,000 staff. Each statement describes a possible response, not a completed action.

The council says betting shops still support more than 36,000 jobs across Britain and argues that further tax rises could hurt workers and high streets. Its campaign makes the industry's stake in the debate clear. Equally, the job and shop figures in its announcement depend on a tax change happening and on businesses responding as the modelling predicts.

What earlier shop numbers show

Past warnings provide some context for the forecasts. The Guardian reported that Betfred had about 1,620 shops in 2019. Since then, it has warned that tougher rules or taxes could force nearly 1,000 closures, while its shop count has fallen by about 330. That history does not prove that a new duty rise would be harmless: the article also noted the broader shift towards online gambling, which can affect the number of high-street shops.

The Guardian also quoted Simon Thomas, chief executive of London's Hippodrome Casino, saying uncertainty over MGD had already led it to shelve a £6 million rooftop expansion plan for which it had planning permission. Thomas forecast that a 40% rate could close a third of bingo halls and casinos. His account describes one investment decision; his wider closure figure remains a forecast.

What remains undecided

The central question is whether the government will propose a duty increase, and in what form. The Guardian described Healey as considering a rise, but the cited reporting does not establish a formal Treasury proposal or a decision date. It also remains unclear how much of any higher tax operators would absorb, pass to customers or offset through changes to their businesses. Those choices would help determine whether revenue rises as the foundation expects or shops and jobs fall as the industry warns.