The Social Market Foundation (SMF) has called for a higher Machine Games Duty (MGD) rate on Category B gaming machines, arguing that the UK tax system should better reflect the level of gambling-related harm associated with higher-stakes land-based products.
The proposal comes as gambling taxation remains under scrutiny following the UK Government's decision to double Remote Gaming Duty from 21% to 40% in the 2025 Autumn Budget, a move Chancellor Rachel Reeves said reflected the greater harms associated with online casino gambling.
The SMF argues the same principle should now be applied to Category B gaming machines, which research has consistently linked to elevated rates of problem gambling.
Under the proposal, a new 40% MGD band would apply to Category B machines, which are found in betting shops, adult gaming centres, arcades and bingo halls.
Category C machines, commonly located in pubs, would remain subject to the existing 20% rate, while lower-stake machines would continue to be taxed at 5%.
According to polling conducted by Survation on behalf of the SMF, 43% of UK adults support increasing taxes on high-street betting shop slot machines, compared with 11% who favour lower taxes.
The survey, carried out between 2 and 7 April 2026, questioned 2,047 adults across the UK and found support exceeded 40% among voters of every major political party.
Alongside the polling, the SMF estimates that increasing the duty could generate between £275m ($375m) and £458m in additional public revenue. Its modelling also puts the annual economic cost associated with problem gambling linked to electronic gaming machines at £2.33bn, drawing on Gambling Commission participation data and cost estimates published by the Office for Health Improvement & Disparities.
Social Market Foundation Chief Economist Gideon Salutin said: "Our modelling shows that raising Machine Games Duty is one of the few tax rises that would actually improve the public finances twice over, once through higher receipts from the machines themselves and again as spending shifts to sectors that generate more jobs and more tax revenue per pound."
The recommendation arrives amid broader debate over the future of gambling taxation and regulation in Great Britain.
Land-based operators have previously argued that further increases to Machine Games Duty would place additional pressure on betting shops, casinos and adult gaming centres at a time when the sector continues to adapt to wider regulatory reforms.
Meanwhile, policymakers have increasingly focused on aligning gambling taxes with evidence of consumer harm rather than applying uniform rates across different gambling products.
Earlier this month, the Gambling Commission reported that Great Britain's gambling industry generated £4.5bn in gross gambling yield during the October to December 2025 quarter, with land-based gambling contributing £1.2bn and more than 191,000 gaming machines remaining in operation across licensed premises.
Category B gaming machines permit stakes of up to £2 every 2.5 seconds and jackpots of up to £500, making them among the highest-staking gaming machines permitted outside casinos
