UK Machine Games Duty: 25% rate to cover machines with stakes over £1 or prizes over £100 from April 2027

How the Machine Games Duty change works

The UK's Machine Games Duty currently has three rates: 5% for low-stake Type 1 machines, 20% for Type 2 machines and 25% for Type 3 machines. At present, any machine that is not Type 1 and has a maximum charge to play of up to £5 is a Type 2 machine and pays the standard rate.

Legislation in the Finance Bill 2026-27 will narrow the Type 2 definition so that a machine qualifies only if its highest charge to play does not exceed £1 and its maximum prize does not exceed £100. Machines above either limit will become Type 3 and pay 25% on their net takings. The rates themselves are not changing. The Treasury will also be able to raise or lower the stake and prize limits by order.

Chancellor John Healey announced the change in his Budget speech on October 28. "To pay for this support for our high streets, I am raising taxes on gambling – by increasing Machine Games Duty from 20% to 25% for higher stakes machines, whilst protecting pubs and seaside arcades," he said. The revenue is linked to business rates relief for retail, hospitality and leisure properties. Adult gaming centres will not get that relief.

HMRC said the measure is meant to ensure that "higher stake and higher prize gaming machines, which are more associated with gambling harm, are subject to a higher rate of MGD." The note says operators will have one-off costs to check that machines are correctly categorised under the new limits, but quarterly MGD returns are not expected to change.

Other Budget 2026 gambling tax measures

• Who pays MGD: From April 1, 2028, suppliers will be liable for MGD on machines they own that are operated under profit-share arrangements. Premises operators will remain liable where they own the machine or rent it on fixed terms and control the takings. The HMRC consultation closes on January 20, 2027.
• Remote Gaming Duty: From April 1, 2027, the Finance Bill will rewrite the Remote Gaming Duty rules on freeplays (renamed "restricted plays"), prizes and tournaments. HMRC said the change is meant to reduce disputes over how these are treated when calculating duty and will not raise extra revenue.

Remote Gaming Duty rose to 40% in April 2026, and General Betting Duty on remote betting is due to rise to 25% in April 2027, under measures from the 2025 Budget. Operators have been responding to those increases, including William Hill owner evoke and Flutter, which plans up to 1,400 UK and Ireland job cuts.

The Betting and Gaming Council said on October 28 that it was deeply disappointed by the MGD rise. Chief executive Grainne Hurst said that "at 25 per cent, EY projects almost 9,000 people could lose their jobs and almost 1,000 betting shops and casinos could close or be at serious risk."

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