Healey Is Set to Raise Machine Games Duty to 25%, Not 40%, The Times Reports

The Times reports that the Chancellor will lift the main rate of machine duty by five points at next week's Budget, a quarter more than today but well short of the doubling campaigners wanted. Nothing is confirmed, the industry says any rise will cost jobs, and Rank's shares rose after the report.

• Chancellor John Healey is set to raise Machine Games Duty (MGD) from 20% to 25% at the Budget on 28 October, according to a report in The Times on 20 October that the Treasury has not confirmed
• The 20% standard rate has not changed since the duty began in 2013 and accounted for £630.5 million of the £638.2 million in MGD liabilities in 2025-26, according to HMRC
• The reported rate stops well short of the 40% Category B rate modelled by the Social Market Foundation and cited by 90 Labour MPs in their letter to Healey, which named no rate
• The Betting and Gaming Council (BGC) said any further tax increase would threaten jobs, high streets and racing, a day after Flutter put up to 1,400 UK and Ireland jobs at risk
• Rank Group shares were up 6.8% and Entain 3.9% by mid-afternoon on 21 October, on Yahoo Finance data, while Evoke barely moved

The Times Reports a Five-Point Rise Instead of a Doubling

Healey will raise MGD by five percentage points, from 20% to 25%, in his first Budget on Wednesday 28 October, The Times reported on Tuesday evening. The report is behind a paywall; the part shown openly says the duty on gaming machines is "set to rise by only 5 per cent in next week's budget despite plea from former prime minister", a reference to Gordon Brown. SBC News said The Times cited unnamed sources, and NEXT.io said the newspaper called the 25% rate a "significant financial boost" for racing. The Treasury has announced nothing and has published no consultation on MGD rates.

The open text does not say whether 25% would replace the whole standard rate or apply only to Category B machines, the target of the MPs' letter. HMRC sets the duty by cost to play, not by Gambling Act category: 5% up to 20p a play with prizes of £10 or less, 20% up to £5, and 25% above £5. In September The Times reported that Healey was weighing a doubling of all three bands. The 16 October letter from Halesowen MP Alex Ballinger and 89 Labour colleagues asked for "a new higher rate of Machine Games Duty for Category B machines" and cited the Social Market Foundation's (SMF) estimate that 40% could raise £275 million to £458 million a year.

The Industry Says Any Rise Will Cost Jobs

"Any further tax increase would heap more pressure on an industry already facing substantial tax rises, threatening jobs, high streets and vital funding for British racing," BGC chief executive Grainne Hurst said on 21 October, citing closures and job cuts at Betfred, Entain, bet365 and Flutter. Remote Gaming Duty rose from 21% to 40% in April, and the remote betting rate of General Betting Duty rises to 25% in April 2027. The BGC's unpublished EY modelling of a 40% rate puts up to 16,000 jobs, nearly 1,500 betting shops and 34 casinos at risk.

Steve Hawkes, Flutter UK's chief reputation and external affairs officer, wrote on X that "Racing's own estimates suggest this increase could close 2,750 bookies and cost the sport £50m"; those estimates are not public. Dan Waugh of Regulus Partners, which has estimated that a doubling would close 4,000 shops according to the Racing Post, told NEXT.io that 25% "really ought not to be a cause for celebration". Rank chief executive Richard Harris told NEXT.io last week that "any increase in [MGD] would reduce the tax take".

Bacta, which represents arcades and adult gaming centres, had not responded on its website by Wednesday afternoon; on 16 October it said the government "must avoid the self-harm that an increase in MGD will cause".

Rank and Entain each gained about 5% in morning trading, NEXT.io reported. At about 14:50 UK time Rank was at 81.7p, up 6.8% on Tuesday's 76.5p close, and Entain at 452.1p, up 3.9%, on Yahoo Finance data. Evoke, owner of William Hill, was at 42.15p against 42.0p.

The 25% Rate Already Exists, Which Makes It the Easy Option

HMRC's 25% higher rate, in force since March 2015 for machines costing more than £5 a play, raised £568,000 in 2025-26. It raised £427.0 million in 2015-16, when betting-shop B2 machines took stakes of up to £100, and fell away after the £2 cap in 2019. Moving the standard rate to 25% would merge two bands at a rate already in law. A Category B rate, as the MPs asked, needs a new band and would still hit the bingo halls and casinos that run Category B machines.

A Quarter More Is Still a Rise, and Only One Side Has Shown Its Workings

On iGaming Times arithmetic, £630.5 million of standard-rate liabilities at 20% implies about £3.15 billion of net takings. At 25% that would owe about £158 million more; at 40%, about £630 million more. That is static, before closures or changes in play, and assumes the whole band moves. It is why 25% reads as a reprieve, and why operators still object: the bill on the same takings rises by a quarter, on a shop estate already shrinking. But the SMF has published its model; the EY figures, Hawkes's 2,750 shops and Harris's claim that receipts would fall have not been shown. If a rise is announced, the Office for Budget Responsibility will have to put its own number on it.

Rank's Move Shows How Far Expectations Had Drifted Towards 40%

Rank, whose Grosvenor casinos and Mecca bingo halls rely on machines, warned a third of its venues would close at 40%, and it rose the most. Entain, where UK shops sit beside a larger online business, rose less; Jefferies said in August that 40% was "more than priced in" for Entain, according to NEXT.io. A tax rise traded as good news shows how much of a doubling the market had priced in.

The Times has reported a smaller rise than the industry feared, not the no-rise outcome it lobbied for, and the Treasury has confirmed neither. The Budget on 28 October will show whether the rate is 25%, and whether it falls on every machine or only the ones MPs asked about.