UK Government Weighs Machine Games Duty Increase Amid Casino Sector Warnings

The UK government is reportedly reviewing plans to double the Machine Games Duty rate from 20% to 40% on gaming machines, a move under consideration ahead of the Budget expected in October 2026, and a recent analysis from the Night Time Industries Association highlights several potential consequences for the casino industry if the change takes effect.

According to the report prepared with modeling support from EY, such an adjustment could place 34 casinos in jeopardy along with up to 3,800 positions, while the North of England and Scotland would experience the most pronounced effects because of higher concentrations of affected venues in those regions.

Details of the Proposed Duty Adjustment

The Machine Games Duty applies directly to takings from gaming machines located in casinos and other licensed premises, and the current 20% rate has remained in place for several years; any shift to 40% would represent a substantial increase that operators say would alter their cost structures significantly. The Night Time Industries Association compiled the findings after commissioning detailed projections, which show how higher duty payments would reduce margins across 108 licensed casino sites that together employ around 14,000 people.

Those projections further indicate that the duty rise could put at risk £100 million in planned capital investments and £73 million in existing tax contributions that the sector currently delivers to the Treasury each year.

Regional Concentration of Potential Effects

Analysis within the report identifies the North of England and Scotland as areas where closures or reduced operations would hit hardest, given the density of casino locations and the reliance of local economies on the associated employment and visitor spending. Operators in these areas often run larger numbers of gaming machines per site, which means the duty increase would scale up more quickly and create steeper financial pressure compared with venues in other parts of the country.

Figures from the modeling suggest that up to 3,800 roles could disappear if a meaningful share of the 34 at-risk casinos were forced to close or scale back, and the impact would extend beyond direct casino staff to suppliers, security providers, and hospitality businesses that depend on casino footfall.

Investment and Tax Receipt Implications

The report outlines that £100 million earmarked for refurbishments, technology upgrades, and new site developments could be deferred or cancelled if the higher duty rate reduces available cash flow, and it also flags the potential loss of £73 million in annual tax receipts that the government currently collects from casino operations. These amounts are presented as direct outputs from the EY modeling exercise commissioned by the Night Time Industries Association, which examined multiple scenarios for duty rates and their knock-on effects across the 108 premises.

Because many casinos operate on relatively narrow margins once staffing, licensing, and maintenance costs are covered, the analysis shows how an additional 20 percentage points of duty would quickly erode profitability and force difficult decisions about which locations remain viable.

Sector-Wide Employment Context

The 14,000 employees referenced in the report work across a mix of large and smaller casino sites that have adapted over time to regulatory changes and shifting player preferences, yet the projected duty increase would arrive at a moment when operators are already managing post-pandemic recovery and competition from online platforms. The modeling indicates that job losses would not be limited to machine-related roles, because reduced revenue would affect bar, restaurant, and entertainment staff who support the broader casino experience.

Data compiled for the report also notes that the 108 licensed premises represent the core of the UK’s bricks-and-mortar casino sector, and any contraction would reduce the overall number of venues available to the public while concentrating remaining activity in fewer locations.

Conclusion

The Night Time Industries Association report, drawing on EY modeling, sets out a range of quantified outcomes if the Machine Games Duty moves from 20% to 40%, including risks to 34 casinos, up to 3,800 jobs, £100 million in planned investment, and £73 million in tax receipts, with the strongest effects expected in the North of England and Scotland. The analysis remains focused on the single proposed change and its modeled consequences for the 14,000 employees and 108 premises that make up the current licensed casino landscape. The full report on impacts of increasing machine games duty to 40% provides the detailed projections referenced throughout the findings.