Budget 2026 series

Budget 2026 29 October 2026

Markets · Gambling

UK Budget 2026: Gambling Companies Back in the Government’s Sights

The Chancellor has raised Machine Games Duty on higher-stakes machines from 20% to 25% from April 2027, a year after Remote Gaming Duty went from 21% to 40%. I look at what is actually changing, which operators carry the exposure, and whether the direction of travel matters more than this particular rise.

Mickey Perry29 October 2026Equity & Markets Insight

Once again in the government’s sights

Once again, the gambling sector has found itself in the government’s sights around Budget day. This Budget increases Machine Games Duty from 20% to 25% for qualifying higher-stakes machines from April 2027, and only last year we saw the substantial increase in Remote Gaming Duty, which rose from 21% to 40% in April 2026, with a new 25% rate on online betting still to come in April 2027.

Gambling taxation at the last six Budgets

What each Budget did to the duties paid by betting and gaming operators, Autumn Budget 2021 to Budget 2026

Budget	Chancellor	Gambling tax measures	Costed yield
Autumn Budget 2021 27 October 2021	Rishi Sunak	Gaming duty bands for casinos raised in line with the Retail Prices Index from April 2022. No rate changes.	nil
Spring Budget 2023 15 March 2023	Jeremy Hunt	Gaming duty bands frozen from 1 April 2023 instead of being uprated. No rate changes.	£5m a year
Spring Budget 2024 6 March 2024	Jeremy Hunt	No gambling tax measures. The bands had already been frozen for 2024–25 at the Autumn Statement 2023, which also announced a consultation on a single tax for remote gambling.	–
Autumn Budget 2024 30 October 2024	Rachel Reeves	Rates left unchanged despite pre-Budget speculation. Gaming duty bands frozen for 2025–26. Consultation confirmed for 2025 on replacing the three remote gambling duties with a single tax.	–
Autumn Budget 2025 26 November 2025	Rachel Reeves	Remote Gaming Duty raised from 21% to 40% from April 2026. New 25% remote betting rate within General Betting Duty from April 2027, with bets on UK horseracing, pool bets, spread bets and self-service terminals excluded. Bingo Duty abolished from April 2026. Gaming duty bands frozen for 2026–27.	£810m in 2026–27, rising to £1,155m by 2030–31
Budget 2026 28 October 2026	John Healey	Machine Games Duty raised from 20% to 25% on machines with a stake above £1 or a prize above £100 from April 2027. Duty liability for profit-share machines moves to the machine supplier from April 2028. Adult gaming centres lose the retail, hospitality and leisure business rates multipliers from April 2027. Gaming duty bands frozen for 2027–28.	£135m in 2027–28 and £150m in 2028–29, plus £10m a year from the rates change

It seems that there is a growing taxation pressure on gambling businesses, although the immediate impact of the latest announcement should not be confused with the effect of the earlier changes.

What specifically is changing?

Machine Games Duty applies to the net takings from a gaming machine: the money staked, less the prizes paid out.

The latest increase applies to machines where the stake exceeds £1 or the prize exceeds £100. In practice that is every category B machine: the B1 machines in casinos, which take a £5 stake and pay up to £10,000, the B2 and B3 machines in betting shops, and the B3 machines in bingo halls and adult gaming centres, all of which take £2 and pay up to £500. Category C machines, the £1-stake, £100-prize machines in pubs and arcades, sit at the threshold rather than above it and keep the 20% rate.

It is not a five-percentage-point increase in the taxation of every gambling activity.

For a business generating £100 million of dutiable net machine takings entirely within the affected category, a rise from 20% to 25% would increase the annual duty liability from £20 million to £25 million. That is £5 million of additional tax, assuming unchanged activity and no adjustment in the tax base.

The government estimates that the measure will raise approximately £135 million in 2027–28, followed by £150 million in 2028–29. The rate rise on its own is costed at £135 million and then £130 million a year; the 2028–29 figure also includes £20 million from making machine suppliers liable for the duty on profit-share machines from April 2028.

In truth, this is quite modest compared with the tax receipts generated by the entire gambling industry. HM Revenue and Customs collected £3.83 billion in betting and gaming duties in 2025–26, of which Machine Games Duty was £641 million. Almost all of that was paid at the 20% standard rate: liabilities at the 25% higher rate were under £1 million last year, having been £433 million in 2018–19, before the £2 stake limit on fixed-odds betting terminals took the betting-shop machines out of the top band. From April 2027 they go back into it.

What the gambling industry pays, duty by duty

UK betting and gaming duty receipts by duty, financial year 2025–26, £ million

Receipts 2025–26Machine Games Duty, the duty raised in this Budget

The seven duties and their rates

What each duty is charged on and the rate that applies, including the changes already legislated

Duty	Charged on	Rate	Receipts 2025–26
Remote Gaming Duty	Profits of online casino, slots, bingo and other gaming offered to UK customers	21% to March 2026; 40% from 1 April 2026	£1,321m
Lottery Duty	National Lottery ticket sales	12% of the ticket price	£980m
General Betting Duty	Bookmakers’ net stake receipts on fixed-odds bets, including shops and online	15% (3% financial spread bets, 10% other spread bets); 25% remote betting rate from 1 April 2027	£685m
Machine Games Duty	Net takings from gaming machines	5% lower rate, 20% standard rate, 25% higher rate; from 1 April 2027 the 25% rate covers machines with a stake above £1 or a prize above £100	£641m
Gaming Duty	Gross gaming yield of land-based casinos	Banded from 15% to 50%, with the bands frozen each year since April 2023	£174m
Bingo Duty	Bingo promotion profits	10%; abolished from 1 April 2026	£26m
Pool Betting Duty	Pool bets other than on horse and dog racing	15%	£4m

Which companies face the greatest pressure?

Entain, owner of Ladbrokes and Coral, has a lot of exposure to both retail betting and online gambling. While Machine Games Duty will affect its UK retail operations, the earlier Remote Gaming Duty increase puts pressure on the online side of the company. However, it also has a significant international operation, which makes it important to distinguish UK tax changes from group-wide performance. Entain said on Budget day that the higher rate will add approximately £25 million a year to the costs of its UK and Ireland retail business before mitigation, which it expects to offset in full by the end of 2028 through estate rationalisation, group-wide savings and market share gains as competitors reassess their UK presence.

Rank Group operates casinos and bingo businesses. Its exposure has to be analysed according to the different tax treatment of its machines, casino gaming and other activities. Its Grosvenor casinos house the B1 machines and its Mecca bingo halls the B3 machines, and together those machines produced £173 million of net gaming revenue in the year to June 2026, a fifth of the group total. Rank said on Thursday morning that the rise will cost it around £9 million a year before mitigation, with roughly £2 million falling in the current year to June 2027, and left its profit guidance unchanged.

Evoke, which operates William Hill and other online betting and gaming brands, may also warrant some attention because of its exposure to the UK gambling market. Its 1,024 remaining William Hill shops, down from 1,302 a year earlier, carry B2 and B3 machines, and its UK retail segment produced £501 million of revenue in 2025. Evoke has not put a figure on the new rate. Its shareholders have already approved the recommended all-share takeover by Bally’s Intralot, with a 52p cash alternative, and completion is expected late this year or early next.

JD Wetherspoon, with its gambling machines within pubs, took £78.9 million from slot and fruit machines in the year to July 2026, 3.5% of its £2.24 billion revenue, and paid £19.7 million of machine duty. Pub machines are category C, limited to a £1 stake and a £100 prize, so on the Treasury’s definition they stay at 20%, and the Budget document says in terms that the existing rate is being maintained to protect pubs and seaside arcades.

The impact will vary considerably between operators. A business generating a greater share of earnings from the affected higher-stakes machines should experience a proportionately greater direct burden.

How much of each company comes from gaming machines

Gaming machine income as a share of group revenue, latest full financial year, %

Where the revenue comes from

Revenue by activity for the four companies, latest full financial year, and whether the activity is caught by the new 25% rate

Company and period	Activity	Revenue	Share	New 25% rate?
Entain Year to 31 December 2025 Group NGR £5,325m	UK & Ireland retail: gaming (machines)	£518m	10%	Yes: B2 and B3 shop machines
	UK & Ireland retail: sports betting and other	£531m	10%	No
	UK & Ireland online: gaming £850m, sports £282m, other £5m	£1,137m	21%	No, but Remote Gaming Duty at 40% since April 2026 and the 25% betting rate from April 2027
	International online and retail	£2,643m	50%	No
	Central and Eastern Europe (being sold)	£522m	10%	No
Evoke Year to 31 December 2025 Revenue £1,782m	UK retail (William Hill shops; machines not split out)	£501m	28%	Yes, for the machine share: B2 and B3 shop machines
	UK & Ireland online	£674m	38%	No, but Remote Gaming Duty at 40% since April 2026
	International	£607m	34%	No
Rank Group Year to 30 June 2026 Group NGR £835m	Grosvenor casinos: gaming machines (B1)	£113m	14%	Yes
	Grosvenor casinos: table gaming £175m, electronic gaming £63m, other £47m	£284m	34%	No: gaming duty
	Mecca bingo: gaming machines (B3 and B4)	£60m	7%	Yes; the venues’ category C machines stay at 20%
	Mecca bingo: bingo £64m, food and other £19m	£83m	10%	No: Bingo Duty abolished April 2026
	Digital £249m (UK £219m) and Enracha, Spain £45m	£294m	35%	No, but UK digital pays Remote Gaming Duty at 40%
JD Wetherspoon 52 weeks to 26 July 2026 Revenue £2,238m	Bar £1,301m and food £822m	£2,123m	95%	No
	Slot and fruit machines (category C)	£79m	3.5%	No: stake £1, prize £100, stays at 20%
	Hotels £23m and other £14m	£36m	1.6%	No

Is taxation the only consideration?

Additional gaming taxes can affect operator and customer behaviour. Businesses may reduce expenditure on less profitable locations, renegotiate supplier arrangements or alter the balance between retail premises and digital activity, and they may change the type of machines they want in their venues.

However, I suspect that this will be quite limited, given that this is not a major increase in the taxation they will be undergoing.

It also has to be remembered that the government will be removing some business rates relief for adult gaming centres from April 2027 as well.

Why the shares rose on the day

Ahead of the Budget, investors had considered the possibility of more aggressive gambling tax increases. The Social Market Foundation had proposed in June doubling the duty on category B machines to 40%, which it estimated would raise between £275 million and £458 million a year, and a group of Labour MPs wrote to the Chancellor calling for a rise on the same machines.

A 25% Machine Games Duty rate is still a negative financial development, but it is less severe than some larger increases that had been discussed. Rank Group closed up 11.7% on Budget day, Evoke up 3.7% and Entain up 3.6%.

I would separate any initial market movement from the underlying effect on operating profit and cash generation.

The investment conclusion

In a general sense, this is unlikely to have a dramatic impact upon these various companies. The tax increase is relatively light on them, and it will not have the same industry-wide impact as a large increase in taxes on all online gambling revenues.

It is nevertheless an additional pressure on a sector already facing substantial regulation and taxation. The businesses most exposed to the affected gaming machines will need to absorb higher costs or identify operational savings.

When reviewing Entain, Rank and Evoke, I would focus on their UK revenue mix, their machine-related gross gaming yield, their existing tax burden and their operating margins. The increase is significant for selected operators, but its importance should not be exaggerated across companies whose exposure to the affected machines is comparatively limited.

I do think that the atmosphere, and the inclination for governments to tax gambling companies, is only on an upward trajectory, and that may be concerning for some of these companies.

The inclination for governments to tax gambling companies is only on an upward trajectory.

The upward trajectory

Total UK betting and gaming duty receipts by financial year, 2015–16 to 2025–26, £ billion