HMRC stats create new talking point in UK gambling tax battle

Receipts from the early stages of the UK’s new gambling tax framework have presented a new challenge for industry lobbying amid yet another intense conversation about whether Machine Games Duty (MGD) will increase in the next budget. Remote Gaming Duty (RGD), the tax paid on online gambling, increased from 21% to 40% on 1 April 2026, though sports betting is excluded. According to HM Revenue and Customs (HMRC), the UK tax office, provisional stats for April-June show RGD receipts of £376m. This is 22% higher, or £67m higher, than during Q2 2025. However, it is less than the £360m collected in Q1 2026, the final quarter of RGD being set at 21%. Nonetheless, the April-June figures fly in the face of one of the industry’s main arguments against increasing gambling tax rates. A key industry talking point is that increasing tax rates ultimately leads to tax receipts declining due to operators taking mitigation measures like cutting odds and marketing budgeted which in turn leads to their own revenue – and therefore tax collected on this revenue – decreasing. To give the industry some credit, it is still early days on the new tax framework and the full impact of any mitigation measures hasn’t yet been felt. The Netherlands is often cited as the best long-term example, with duty increases in 2025 leading to just €2m extra being collected, as opposed to the €108m extra the Dutch government expected. However, politicians in the Labour government – many of whom, including Prime Minister Andy Burnham himself, have been shown to be not exactly sympathetic to industry arguments – may see HMRC’s tax figures as another example of the industry crying wolf. Gaming machines too tantalising a tax target? The November 2025 budget, unveiled by ex-Chancellor of the Exchequer, Rachel Reeves, increased the aforementioned RGD from 21% to 40% from April 2026. It also increased General Betting Duty (GBD) from 15% to 25% from April 2027, with retail betting excluded from the latter. The budget also saw the 10% Bingo Duty scrapped. John Healey, current Chancellor of the Exchequer, will unveil the first Budget of Burnham’s administration on 28 October. Though nothing has been confirmed by the government, Healey and Burnham are rumoured to be considering a doubling of each rate of MGD: Increasing the 5% rate on Type 1 machines to 10% Increasing the 20% standard rate on Type 2 machines to 40% Increasing the higher rate of 25% on all other machines to 50% HMRC stats are going to be hard for the government to resist. Andy Burnham has extensive plans for infrastructure and social services development in the UK, including a recently-announced plan to create a National Care Service. This will require significant funding. Under the existing MGD rate, receipts of £160m were declared during Q1 of 2026, more or less the same as the year prior. HMRC’s provisional stats put the April-June intake at £162m, 5% higher than the previous year. With inflation again on the rise and various public and private sectors crying out for investment, as well as increased pressure to boost defence spending, squeezing some more revenue out of this sector is going to be hard for the government to pass up on. Betting industry makes its final stand This is all in the midst of industry lobbying, of course. The Betting and Gaming Council (BGC), the main trade body for regulated UK betting and gaming firms, has gone into overdrive, launching its “‘Back Our Betting Shops” campaign last week. The impact an increase in MGD could have on betting shops has formed the crux of the industry’s lobbying efforts. This has included extensive media appearances, with JenningsBets founder and CEO Greg Knight following Betfred founder Fred Done by speaking to the Sunday Times. Knight argued that an increase in MGD could lead to over 100 of his own shops being forced to close, this coming mere months after the company opened the doors on its 200th venue. This messaging has been echoed by the British Horseracing Authority (BHA), with horse racing relying heavily on the horse racing levy paid by the UK betting industry for its own financial support. The BHA has cited Gambling Commission stats that horse racing turnover from betting shops was £2.9bn in 2025/26. The authority’s main concern is that increasing MGD would lead to shops closing, cutting off this vital revenue stream. The BHA claims that a 40% standard rate of MGD would lead to 4,050 betting shops closing, and therefore 28,000 jobs being lost. This would in turn hit horse racing to the tune of $24m in levy contributions and £68m in media rights payments, and in turn reduce racing and betting’s receipts to the Treasury by 32%, the BHA argues. Meanwhile, the BGC has brought casinos into the mix. The trade body states that UK casino operators have more than £200m in investment planned for 2026/27, and that doubling the standard rate of MGD would wipe out more than £50m of this. “These are not just investments in casinos,” said Grainne Hurst, BGC CEO. “They are investments in Britain’s towns and cities. They create skilled jobs, drive footfall for neighbouring businesses and support the restaurants, hotels, bars and attractions that help our high streets and city centres thrive.” A number of lobbyists are opposing the industry too, however. The Social Market Foundation (SMF) is one of the biggest proponents of increasing MGD, and former Prime Minister Gordon Brown – one of the architects of modern British betting regulation back in the 2000s – is a vocal supporter of the think tank’s proposals. James Noyse, a SMF researcher and former government advisor, was a recent speaker on a Labour party conference panel alongside Burnham’s choice for Gambling Minister at the Department for Digital, Culture, Media and Sport (DCMS), Vicky Foxcroft. Once again, this hammers home that the government is clearly not sympathetic to industry viewpoints. Couple this with its need to raise funds to support extensive projects and offset economic challenges caused by inflation and overseas wars, and it looks like the odds are stacked firmly against the industry.