Ninety Labour MPs Ask Healey for a Higher Machine Games Duty Rate on Category B Machines

Twelve days before the Budget, Halesowen MP Alex Ballinger and 89 Labour colleagues have asked the Chancellor for a new, higher duty rate on the Category B machines in adult gaming centres, betting shops and casinos. The letter cites a 40% rate without asking for one, and the industry says any rise would close venues and "kill the British seaside".

• Labour MP Alex Ballinger and 89 Labour colleagues wrote to Chancellor John Healey on 16 October urging "a new higher rate of Machine Games Duty for Category B machines" at the 28 October Budget
• The letter cites the Social Market Foundation's (SMF) estimate that a 40% Category B rate could raise £275 million to £458 million a year, but its formal request names no rate; Category B machines pay the 20% standard rate today
• It is narrower than the 2025 letter of 101 Labour MPs Ballinger co-led: pubs, bingo games and lower-category machines are protected, betting shops are not
• The Betting and Gaming Council (BGC) called the idea "deeply misguided" and Bacta said it would "kill the British seaside and cost thousands of jobs", with the BGC's EY modelling putting up to 16,000 jobs at risk from a 40% rate
• Both sides model the same 40% scenario: up to £458 million of extra revenue for the SMF, a net loss of up to £124 million for EY, whose report is unpublished

Ninety Labour MPs Put Their Names to a Targeted Rise on Category B Machines

Ballinger, MP for Halesowen and Labour co-chair of the All-Party Parliamentary Group for Gambling Reform, published the letter on X on Friday 16 October, writing that "90 Labour MPs have written to the Chancellor". Dated the same day, it urges Healey "to introduce a new higher rate of Machine Games Duty for Category B machines", which it calls "a popular, targeted and proportionate way to raise revenue". NEXT.io, which first reported the letter, said it had 89 co-signatories, none of them cabinet ministers, among them former health minister Dr Zubir Ahmed, Dawn Butler and Stella Creasy. Ballinger posted two of the letter's five pages, and iGaming Times has not seen the signatory list.

The letter presents itself as the sequel to the 2025 Budget, which raised Remote Gaming Duty from 21% to 40% and abolished bingo duty. It asks Healey to apply "the same principles" to Machine Games Duty (MGD), "notably Category B machines, particularly B3 machines which permit rapid play at stakes of up to £2 and £500 prizes". AGCs are where "the case is starkest", it says: 47% are in the most deprived fifth of the country, and the most deprived local authorities have more than six times as many per head as the least deprived. It links the duty to the Prime Minister's plan to reform the "Aim to Permit" rule, though the consultation on Aim to Permit has not yet started.

Pubs "cannot offer Category B machines, so no pub machine would face a higher rate", the letter says, and bingo games would stay duty-free. NEXT.io noted that many bingo halls hold Category B machines and that betting shops get no carve-out. The polling the letter cites is about bookmakers: 43% of voters back higher taxes on slot machines in high-street betting shops, against 11% for a cut, in polling it attributes to the SMF and to Survation. In a statement reported by NEXT.io, Ballinger said: "Gambling companies should not be allowed to pocket the profits while families and communities pick up the bill."

The Same 40% Rate, Two Opposite Sums

HM Revenue and Customs sets MGD's three rates by cost to play and top prize: 5% for machines costing 20p or less with prizes of £10 or less, 20% for 21p to £5 with prizes of £11 or more, and 25% above £5. Category B machines sit in the 20% band. MGD raised £641.0 million in 2025-26, according to HMRC figures iGaming Times reported this week.

The SMF's June report, "Addressing the harm", recommends doubling MGD on Category B machines to 40% and estimates an extra £275 million to £458 million a year, which the letter says allows "for significant behavioural change". It puts the economic losses linked to machine gaming at £2.33 billion, including £669 million in fiscal costs.

The chief executives of Entain, Flutter UK & Ireland, bet365, Bally's Corporation, evoke and Betfred wrote to Healey on 14 October citing EY analysis of exactly that scenario: a 40% Category B rate could close a further 690 to 1,470 betting shops and 28 to 34 casinos, cost 11,600 to 15,900 jobs and leave the Exchequer up to £124 million worse off, according to the BGC. BGC chief executive Grainne Hurst told NEXT.io it was "deeply misguided" to suggest higher taxes on betting shops and casinos would protect high streets.

Bacta, the trade association for Britain's land-based gaming and amusements industry, told NEXT.io the proposals "would kill the British seaside and cost thousands of jobs". Its director of communications, Allaster Gair, said in a statement the same day that the government "must avoid the self-harm that an increase in MGD will cause". Rank Group chief executive Richard Harris told an industry event this week that any rise above 20% would cut overall tax take, according to NEXT.io; Rank closed three Grosvenor casinos in its first quarter.

The Narrower Ask Is the Harder One to Refuse

In September 2025, 101 Labour MPs signed a letter led by Ballinger and Beccy Cooper asking Rachel Reeves to adopt the Institute for Public Policy Research's plan, including 50% MGD on cash-prize machines. The Budget went part of the way online and left machines alone. This year's letter has fewer names but a sharper design: one category, pubs and bingo protected, and the harm-based logic it credits to last November's Budget. By naming no rate, it lets Healey satisfy 90 backbenchers with any increase above 20%. The catch is mechanical: HMRC's bands follow price of play, not Gambling Act category, so a Category B rate means restructuring the duty, and unless excluded, bingo halls and casinos with B machines would be caught along with AGCs and shops.

Only One Side Has Shown Its Workings

The argument turns on how much Category B play disappears at 40%. The SMF has published its report; EY's modelling for the BGC has not been released. A net loss of £124 million and a gain of up to £458 million cannot both be right, and the Office for Budget Responsibility would have to choose a number if a rise is announced. The industry's case is not implausible: Italy's Treasury told MPs this week that a two-point rise on slot machines could lose revenue. But that was a market where play had already fallen sharply, and until EY's report is public the BGC's figure is an assertion.

The Budget Fight Now Has a Parliamentary Side

Until today the MGD debate was mostly the industry's campaign against a reported Treasury plan. The letter gives the other side 90 Labour names, but none speaks for the government. The decision stays with a Chancellor who needs revenue and has been told by each side that the other's numbers are wrong.

Healey now has a targeted proposal with backbench support and an industry warning built on unpublished maths. Which of them weighed more will be clear on 28 October.