The Social Market Foundation (SMF) has welcomed the UK Government’s increase in Machine Games Duty (MGD) to 25%, while questioning whether the change is large enough to influence industry behaviour.
Responding to the Budget, chief economist Gideon Salutin said higher taxation reflected the harm associated with machine gambling and would help fund public costs linked to healthcare, housing and crime.
However, he described the increase as relatively limited and expressed scepticism that it would produce significant changes in how the industry operates.
The rise from 20% to 25% is below the 40% rate the think tank proposed for Category B machines in a report published earlier this year.
That report argued gambling taxes should reflect differences in product-related harm, extending the rationale used for higher Remote Gaming Duty to land-based machines.
SMF recommended limiting its proposed increase to Category B machines, leaving lower-stake categories unchanged to protect hospitality businesses, including pubs.
Its modelling estimated annual economic losses associated with machine gambling harm at £2.33bn ($3.1bn), including £669m in fiscal costs through welfare, housing, crime and health expenditure.
The think tank estimated that its proposed 40% rate could generate between £275m and £458m in additional revenue.
The actual Budget increase has prompted contrasting assessments from operators. An independent bookmaker quoted by the Racing Post estimated additional annual costs of approximately £10,000 per shop, while Buzz Bingo warned that a five-percentage-point rise could push 40% of its clubs into losses.
BGC previously opposed any MGD increase, arguing that higher taxation could cause closures, job losses and migration to unlicensed operators.
SMF’s estimate of £275m-£458m in additional revenue concerned its proposed 40% rate, rather than the announced 25% rate
