The backlash over the widely discussed rise in the UK gambling tax appears to be felt not only by operators. The already struggling hospitality industry, which relies on gaming machines as a source of revenue, also stands on the brink of trouble.
Sir Tim Martin, the founder of the British pub chain JD Wetherspoon, told The Times that raising the Machine Gaming Duty (MGD) from 20% to 50% would create serious concerns for the hospitality sector.
The 50% figure for MGD appears in a report by the think tank Institute for Public Policy Research (IPPR). The institute has also called for the online slots tax to be increased from 21% to 50%, for the general betting duty imposed on bookmakers to rise from 15% to 25%, and for general betting duty rates and the horse racing betting levy to remain at 15% and 10% respectively. The IPPR proposal has been supported by former UK Prime Minister Gordon Brown as a way to tackle child poverty.
It is expected that Chancellor Rachel Reeves will include a gambling tax increase in next year’s budget, which the Labour government will present on 26 November. However, it is not yet known which specific tax rates will be raised.
The Times notes that if the IPPR’s proposed MGD figures are applied, Wetherspoon’s gambling duty liabilities would rise from around £27.5m to £45.7m for the past year. Based on current gambling revenues, Martin said that the chain’s total post-tax profits would fall by 48%.
Although Wetherspoon’s gaming machine revenue increased by 11% in 2024 compared to the previous year, Martin said that these machines account for a smaller share of overall sales than in previous years. However, Martin’s comments against the tax increase are only part of the broader pushback from the gambling industry in recent months.
Rank Group CEO John O’Reilly said in October that the company is paying its “fair share” of tax.
In its report for the first quarter of the 2025/26 financial year (1 July – 30 September), O’Reilly expressed confidence in the year ahead. He also noted that Rank and the Treasury are in discussions about how a tax rise may affect the company’s operations.
The Chief Executive said: “Speculation regarding tax changes in the upcoming budget is, inevitably, hanging over the business. We are engaged with the Treasury on the implications of tax changes on the viability of our venues, employment levels, future investment and the customer.
“Last year the group generated £44.6m in profit after tax, having paid HMRC and local authorities £188m in taxes. The Rank Group, with its strong UK focus, is certainly paying its fair share.”
The Betting and Gaming Council (BGC) has also opposed the tax increase. A report by PricewaterhouseCoopers (PwC), commissioned by the BGC, analysed European markets that have taken similar steps.
The report noted that a tax rise could lead to higher prices for operators and cuts in marketing and bonuses. This, in turn, could negatively impact the rate of channelisation into the regulated sector, with some players turning to unlicensed operators.
BGC CEO Grainne Hurst also spoke out against raising gambling taxes during a Treasury Committee hearing in October.
Hurst said: “The industry has a lot of regulations in place voluntarily and the white paper to raise those standards. We track behavioural triggers, late-night play, chasing losses, so we make sure players are staying within the regulated space.”
However, the committee did not seem persuaded by the industry’s arguments and remained sceptical of the BGC-commissioned research. Mainstream media have also sharply criticised the standards body for defending the industry – particularly for its persistent denial of gambling’s role in causing social harm.
Stakeholders in the gambling and hospitality industries now have just over a week to find out exactly how the draft budget will affect their operations.
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