As budgets take shape across Europe, the gambling industry faces a fresh wave of potential tax increases as governments seek additional revenue and address pressure on public finances.
Italy and Lithuania are advancing changes that could increase the tax burden on gambling operators, though the proposed measures and their potential impact vary by market. Meanwhile, the UK increased Machine Games Duty (MGD) to 25% yesterday.
Italy: Slightly higher machine tax and licence extension costs
Italy could raise taxes on banks, insurers, energy firms and the gaming industry to help finance its 2027 Budget. Ministers announced the plans after the Cabinet approved the final financial bill under Prime Minister Giorgia Meloni before next year's election. The new Budget Law could significantly affect several types of gaming.
The measures would include a 1-percentage-point increase in the PREU tax on slot machines and video lottery terminals (VLTs). PREU (Prelievo Erariale Unico), meaning Single Tax Levy, is Italy's gambling tax on wagers placed on gaming machines.
The Budget Law would also extend land-based licences for betting, slot machines, VLTs and bingo at a higher cost than previous extensions.
These extensions are needed because Italy failed to meet this year's deadline to reorganise its land-based gambling sector.
The planned reorganisation aimed to harmonise requirements and establish a clearer regulatory framework for new licences covering AWPs, VLTs, betting shops, and bingo halls. With the reform delayed, existing concessions will need to be renewed instead.
Meloni estimates that the Government's share of revenue from measures affecting the gaming sector would amount to €700m. However, this figure could be revised upwards in the final Budget text.
Minor adjustments to online gaming regulations are also being considered, subject to the principle of fiscal invariance.
The Budget is now moving to Parliament, where amendments may be submitted before the final vote deadline of 31 December 2026. If approved, the legislation will come into force on 1 January 2027.
Lithuania: Proposed new gambling and lottery taxes
Lithuania's governing coalition is considering introducing excise taxes on gambling and lotteries as part of efforts to reduce the projected Budget deficit for 2027.
Virginijus Sinkevičius, chairman of the Democratic Union ‘For the Name of Lithuania’, said the current Budget proposal was unacceptable due to its projected deficit of 3.8% of GDP.
Prime Minister Mindaugas Sinkevičius said additional taxation of gambling and lotteries was among the measures discussed by coalition partners. The proposed changes are expected to take effect on 1 July 2027.
However, the tax measures have not yet been finalised. The coalition plans to establish a working group to discuss changes to the Budget.
UK: Machine Games Duty increased to 25%
The UK Chancellor, Jon Healey, has unveiled the 2027 Budget, confirming an increase in MGD on higher-stakes machines to 25%. Although the rise is less severe than the doubling proposed by the Social Market Foundation think tank, its effects will still be felt across the gambling industry.
Gaming machines are a key factor in determining betting shops' profitability. The tax increase could push outlets already operating on narrow margins into losses.
The impact could extend beyond betting shops. The BBC has reported that bingo halls and amusement arcades have also warned of possible closures following an increase in MGD. Buzz Bingo reportedly warned that a five-percentage-point rise could push 40% of its clubs into loss-making territory.
The BGC, SMF and Entain have since reacted to the news, while Paul Sculpher gave Global Gaming Insider his exclusive take on the tax increase.
Moldova has also increased gambling taxes as part of its 2027 budget, introducing a new 6% levy on gambling and lottery participation
