Entain Puts Machine Games Duty Rise at £25m a Year and Keeps Its 2028 Target

The Ladbrokes and Coral owner puts the Budget's five-point rise in duty on its shop machines at about £25 million a year before mitigation, an eighth of its estimate for last year's online tax rises. It expects to offset it all by the end of 2028 and has left its guidance unchanged.

• Entain estimates that the Budget's rise in Machine Games Duty from 20% to 25% from 1 April 2027 will cost its UK and Ireland retail business about £25 million a year, before any mitigation
• It expects estate rationalisation, group-wide optimisation and potential market share gains to offset the cost fully by the end of 2028, and gives no net figure for 2027
• Its FY26 guidance, reiterated on 15 October, and its expectation of £500 million of annual adjusted cashflow in 2028 are unchanged
• The estimate is an eighth of the roughly £200 million a year Entain attached to the November 2025 online duty rises, and a quarter of the £100 million it told the Prime Minister a doubled rate would cost
• Chief executive Stella David called the rise "another disappointing decision by the Government", while the Bingo Association says its modelling shows loss-making bingo clubs rising to 77

Entain Puts a Price on the Machine Duty Rise

Entain plc (LSE: ENT), which owns Ladbrokes and Coral, published its statement through the regulatory news service at 2.30pm on 28 October, after Chancellor John Healey's Budget raised Machine Games Duty (MGD) on machines with stakes above £1 or prizes above £100. According to the announcement, duty on gross gaming revenue from what Entain calls the type 2 gaming machines in its shops rises from 20% to 25% from 1 April 2027. Entain estimates an annualised additional cost to its UK&I Retail business of approximately £25 million before any mitigating measures, based on consensus estimates of FY27 UK&I Retail net gaming revenue. It gives no net figure, no phasing by year and no number of shops or jobs affected.

The company says it expects to "fully mitigate the impact of this latest tax increase by the end of 2028" through "estate rationalisation, Group-wide optimisation initiatives and potential market share gains". Citing "the strongest offering on the UK High Street", it sees "an opportunity for customer recapture as peers re-evaluate their UK market presence". FY26 guidance as stated on 15 October, including underlying EBITDA at the lower end of £910 million to £960 million, is unchanged, as is the expectation of £500 million of annual adjusted cashflow in 2028.

Chief executive Stella David said last November's increases "have already had detrimental consequences across the industry" and that the new changes "will further compound that damage and push more people into the growing illegal market". The priority, she said, "is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets."

The Second UK Tax Bill in 11 Months

Entain's statement of 26 November 2025 put the cost of raising Remote Gaming Duty from 21% to 40% from April 2026, and of a new 25% remote betting rate within General Betting Duty from April 2027, at about £200 million a year to its UK&I Online business before mitigation, or about £150 million of EBITDA from 2027 after mitigating a quarter. With its 2025 results on 5 March it raised that to offsetting more than 50% from 2027, and recorded a £487.7 million impairment against its UK business. Its table at the time showed retail gaming staying at 20%, so today's rise is the first of the recent duty increases to reach its shops. The Budget announced no change to either online rate. In the first half of 2026 UK&I Retail reported underlying EBITDA of £114.1 million, according to Entain's interim results.

Pre-Budget Lobbying Priced a Bigger Rise

Writing to Prime Minister Andy Burnham on 11 September, David argued that doubling the standard rate to 40% would add around £100 million a year to the cost of running Entain's retail business, which she said had more than 2,300 shops. Evoke, owner of William Hill, urged restraint in its own update on 23 October, saying it had about 270 fewer shops than a year earlier.

The Bingo Association called the rise "a serious blow to bingo", saying the government had abolished Bingo Duty in April and "taken much of that back". Its modelling shows loss-making clubs rising to 77, and it says the £50 million operators committed to clubs outside London and the South East this year "will fall away".

The £25m Figure Is the £100m Warning Scaled Down

Five points is a quarter of the 20-point rise Entain warned against, and £25 million is a quarter of the £100 million it put on that rise. The estimate reads as the extra duty on consensus machine revenue, not a model of how customers respond. The UK Treasury's policy costing assumes operators may pass some of the rise on by lowering return to player, that machine demand falls as a result, and that a quarter of the lost stakes moves to remote gaming. Entain's mitigation list does not mention return to player, so how much of the cost falls on customers is not disclosed.

Unchanged Guidance Says Less Than It Appears

FY26 ends three months before the new rate applies, so its guidance was never exposed. The test is 2027, for which Entain has given no EBITDA guidance and in which nine months carry the higher rate. Full mitigation is promised only by the end of 2028, so the 2028 cashflow target now rests on it arriving on time. Estate rationalisation, the first lever Entain names, means closing shops, which sits awkwardly beside a stated priority of protecting jobs.

Recapture Depends on Rivals Leaving the High Street

Entain is betting that the strongest estate outlasts weaker ones and inherits their customers, and Evoke's shrinking estate lends that some support. The same statement warns that the tax will push people towards illegal operators. If displaced shop customers walk into the nearest Ladbrokes or Coral, Entain gains share; if they move offshore, its estate pays a higher rate on falling revenue.

At £25 million a year the machine rise is small beside the online increases Entain has already absorbed, and the company says it can cover it. Whether it does so by winning customers or by closing shops will show in the UK&I Retail numbers through 2027.