Badenoch Says Labour's Gambling Taxes Will Put "Good Companies" Out of Business as the Machine Duty Decision Nears

The Conservative leader told The Sun that Labour is in a "tax doom loop" and that the operators who follow the rules will be the ones to close. Her intervention lands five weeks before a Budget in which the Treasury is reported to be modelling a doubling of Machine Games Duty, and as the Betting and Gaming Council puts the cost at up to 16,000 jobs.

• Conservative leader Kemi Badenoch told The Sun that "Labour are in the tax doom loop. They raise taxes, businesses close, less money comes in, and so they have to raise taxes even further", SBC News reported on 23 September
• She said "the good companies, the ones that follow the rules, that pay their taxes, will go out of business"
• The Treasury is understood to be modelling a doubling of Machine Games Duty from 20% to 40%, a rate proposed by the Social Market Foundation, ahead of the Budget on 28 October
• Betting and Gaming Council chief executive Grainne Hurst has cited EY modelling that up to 16,000 jobs, nearly 1,500 betting shops and as many as 34 casinos would be lost, and that the Treasury could end up £124 million worse off
• Betfred's Fred Done has said a doubling would close about 495 of his shops with the loss of 2,475 jobs

The Opposition Leader Takes the Industry's Argument as Her Own

Badenoch made the remarks in an interview with The Sun, according to SBC News, which reported them on Wednesday. "Labour are in the tax doom loop. They raise taxes, businesses close, less money comes in, and so they have to raise taxes even further," she said. "The good companies, the ones that follow the rules, that pay their taxes, will go out of business." SBC News reported that she also described the government's approach as "cannibalising" the high street.

The comments follow reports that the Treasury is looking at Machine Games Duty, the tax on gaming machines in betting shops, bingo halls, casinos and adult gaming centres, before the Budget on 28 October. The Times reported on 8 September that officials were modelling a rise from 20% to 40%, the rate recommended by the Social Market Foundation (SMF) think tank. The Treasury has not confirmed any change. The previous Budget, in 2025, raised Remote Gaming Duty on online casino to 40%, and operators have since cited it in cost cuts, including Entain's consultation on 400 customer care jobs this month.

The Industry's Numbers

The Betting and Gaming Council (BGC) has set out its case in an article by its chief executive, Grainne Hurst, first published in PoliticsHome. Citing EY modelling, she wrote that following the SMF's advice would cost up to 16,000 jobs, nearly 1,500 betting shops and as many as 34 casinos, and that "the Treasury could end up £124 million worse off for it". She also wrote that since 2019 more than 3,000 betting shops have closed with over 16,000 jobs lost, along with 22 casinos and 108 bingo clubs. Fred Done, chairman of Betfred, has put his own figure on a doubling: about 495 shops and 2,475 jobs.

Those figures are contested. When the BGC's EY modelling was used to argue against online duty rises last year, the Institute for Public Policy Research (IPPR) said the elasticity assumptions behind it lacked independent verification and that "discussion with an interested party is not an appropriate basis for credible economic modelling". The SMF, whose report started the current debate, assumes a higher machine duty would raise revenue, according to Hurst, who also notes that the report acknowledges reducing the supply of gambling as part of its intended effect.

An Opposition Leader's Warning Changes the Politics, Not the Arithmetic

Badenoch has no vote on the Budget, and the Conservatives took a similar position in 2025, when they presented themselves as allies of racing before Remote Gaming Duty was raised anyway. What her intervention does is make machine duty a party-political dividing line rather than a technical Treasury choice. With The Sun, according to iGaming Business, running a campaign on the issue, a Chancellor raising the duty would now be doing so against a named opposition argument and a tabloid campaign, which raises the political price even if it does not change the fiscal calculation.

The Doom-Loop Claim Is Testable, and Land-Based Is Where It Is Most Plausible

The claim that a tax rise will cost more in closures than it raises is the industry's standard argument, and the IPPR's objection is that the demand behind online gambling is sticky enough to absorb higher rates. Machine duty is a weaker case for that objection. Machines account for half of Betfred's shop profits, Done has said, and a shop that closes pays no duty, no business rates and no Horserace Betting Levy. The question for the Treasury is whether players in a closed shop move to another licensed shop, go online at a rate taxed at 40%, or stop. The industry says a share goes to the black market; by Hurst's reading of the SMF report, less gambling is part of the point.

The Treasury will make its choice on 28 October. Badenoch has ensured that whichever way it goes, the machine duty decision will be read as a political one.