TLDR
- The Social Market Foundation wants the government to raise Machine Games Duty on Category B electronic gaming machines above the current 20% rate.
- Doubling the rate to 40% could raise between £275 million and £458 million a year, according to SMF modelling.
- Category B machines show higher rates of problem gambling, with 26.5% of casino machine users scoring as problematic gamblers.
- The Betting and Gaming Council rejects the proposal, warning it could cost tens of thousands of jobs.
- Regulus Partners estimates up to 70% of betting shops and 90% of adult gaming centres could close if the tax rises.
The Social Market Foundation has called on the UK government to raise tax on higher-risk gambling machines. The think tank published its report on Tuesday, ahead of the next budget.
The proposal targets Category B electronic gaming machines. These are found in betting shops and adult gaming centres across the country.
Currently, Machine Games Duty sits at a flat 20% rate. The SMF wants a new tax band created specifically for Category B machines, set above that level.
Category C and D machines would stay at their current rates of 20% and 5%. The report focuses only on the higher-risk category.
Problem Gambling and Deprived Areas
Gambling Commission data shows Category B machines carry higher rates of problem gambling. Some 26.5% of casino machine users scored as problem gamblers on a standard measurement scale.
That compares to an average of 4.5% across all gambling activities. Fruit and slot machine players also showed higher rates, at 16.9%.
Adult gaming centres make up 42% of these machines in Great Britain. Their revenue grew 11% year-on-year to around £623 million in 2023-24.
The report found these centres cluster in poorer neighborhoods. Nearly half of licensed centres sit in the most deprived fifth of areas in the country.
The SMF puts the total economic cost of machine-related harm at £2.33 billion a year. That figure includes £669 million in direct costs to welfare, housing, crime, and health services.
If the rate doubled to 40%, matching last year’s increase to Remote Gaming Duty, it could raise £275 million to £458 million annually. Each further five-point increase could add £51 million to £114 million.
Industry Pushback
The Betting and Gaming Council rejected the report. A spokesperson said the group opposes any increase in the tax.
The BGC warned that betting shops, bingo halls, and working men’s clubs serve local communities. It said higher rates would force venue closures and job losses.
The group previously estimated the last tax rise could pull £3.1 billion from the economy. It projected up to 40,000 job losses across the gambling sector.
Advisory firm Regulus Partners issued its own forecast. It estimated 70% of the UK’s 5,500 betting shops could close under the new tax.
It also projected 90% of adult gaming centres shutting down. That would mean roughly 1,300 of the 1,450 centres closing.
Regulus estimated betting shop revenue would fall from £1.2 billion to £600 million. Adult gaming centre revenue would drop from £550 million to £115 million.
The firm said up to 43,000 industry jobs could be lost. It also warned that horseracing could lose £100 million in media rights and levy income.
Regulus predicted half of the lost machine revenue would shift to illegal gambling operators. The SMF disputes this, pointing to international data that does not show a clear link between tax rates and black market growth.
Polling from April 2026 found 43% of people support raising machine gambling taxes. Only 11% wanted the rate lowered.
