Machine Games Duty (MGD) on higher-stakes gaming machines in the UK will rise from 20% to 25% from 1 April 2027, Chancellor of the Exchequer John Healey confirmed in the Budget he delivered to the House of Commons on 28 October 2026.
The increase applies to machines with a maximum charge to play above £1 or a maximum prize above £100, according to the Budget 2026 overview of tax legislation and rates published by HM Treasury and HMRC. Machines under both limits stay at the standard 20% rate. The measure will be legislated in the Finance Bill 2026-27.
Gambling tax pays for high street relief
The higher gambling tax is one of the revenue measures funding a support package for high streets, according to the BBC’s live coverage of the Budget. Healey told MPs he was raising the Small Business Rate Relief threshold for retail, hospitality and leisure businesses from £12,000 to £18,000 of rateable value.
About 70,000 businesses will pay no business rates as a result, Healey said, according to Reuters. Other retail, hospitality and leisure businesses will see their rates frozen in real terms. The relief extends earlier support: Prime Minister Andy Burnham said in July that business rates for pubs, clubs and live music venues would fall by 20% from April 2027. The Budget also confirmed that all business rates will be kept by local government by 2030, with 20% of the revenue going to regional mayors from 2027.
What the Machine Games Duty rise means for operators
The £1 stake and £100 prize limits match the line between the Gambling Commission’s category B machines and the lower categories C and D. The 25% rate therefore falls on the B2 and B3 machines in betting shops, adult gaming centres and bingo halls, and on the B1 machines in casinos. Fruit machines in pubs and clubs, which are category C or D, stay at 20%.
For retail betting groups, MGD is charged on net takings from the machines, so the 5 percentage point rise comes straight off machine profit unless operators cut costs or estates. The rise lands one year after the Budget of 26 November 2025 almost doubled Remote Gaming Duty from 21% to 40% from 1 April 2026, and in the same month as the new 25% rate for remote betting under General Betting Duty starts on 1 April 2027. Groups with large UK retail and online estates, such as Entain, carry both increases.
Two further measures in the Treasury document affect suppliers and casinos. From 1 April 2028, machine suppliers will be liable for MGD on supplier-owned machines run under profit-share deals; premises licence holders, permit holders and pub tenants remain liable where they own the machine or rent it on a fixed fee and control the takings. The government also froze the gross gaming yield bands used to set Gaming Duty for casinos from 1 April 2027 to 31 March 2028, so casino operators pay higher rates sooner as revenue grows.
Online operators get a rule change without a rate change. From 1 April 2027, Remote Gaming Duty legislation will set out the tax treatment of freeplays, prizes and tournaments, and freeplays will be renamed “restricted plays”.
Next steps
The higher MGD rate and the Remote Gaming Duty changes will go into the Finance Bill 2026-27 and take effect on 1 April 2027. The consultation on supplier liability for MGD runs until 20 January 2027, ahead of the April 2028 start. Earlier UK tax rises are already visible in operator guidance, including Bally’s Intralot’s 2026 outlook.
Source: HM Treasury
