ProposalAnnounced at Budget 2026; legislation in Finance Bill 2026-27, rate applies from 1 April 2027.
Budget 2026: Machine Games Duty rises to 25% on higher-stake gaming machines
Machine Games Duty will rise from 20% to 25% on gaming machines with stakes over £1 or prizes over £100 from 1 April 2027, the government announced in the Budget on 28 October. Lower-stake machines in pubs and seaside arcades keep their current rate. [1][2]
The change hits land-based venues such as adult gaming centres, bingo halls, betting shops and casinos, not online casinos. The government says the money will help pay for a freeze in business rates for retail, hospitality and leisure. [2][3]
What changes
Machine Games Duty (MGD) is charged on the net takings from gaming machines. Today a machine with a stake of up to £5 that is not a low-stake Type 1 machine pays the 20% standard rate. From 1 April 2027, a machine stays in that band only if its highest stake is no more than £1 and its top prize no more than £100. Machines above either limit move to the 25% higher rate. [2]
The 5% lower rate for machines with stakes up to 20p and prizes up to £10 does not change. [2]
Why the government is doing it
The Treasury says higher-stake and higher-prize machines are more associated with gambling harm and are commonly found in venues such as adult gaming centres. Keeping the existing rate for lower-stake machines is meant to protect pubs and seaside arcades. [3]
The measure is expected to raise £135m in 2027-28 and around £130m a year after that, according to HMRC's impact note. Around 5,100 operators running some 12,400 premises are expected to be affected. [2]
What it means for players
MGD is paid by businesses, not players. HMRC says the change will only reach players if venues pass it on through lower returns to players, and that some people may gamble less or switch to other forms of gambling as a result. [2]
A second change from 2028
The Budget also moves liability for MGD to machine suppliers for supplier-owned machines run on profit-share deals, from 1 April 2028. Venues that own their machines or rent them for a fixed fee stay liable. HMRC is consulting on the details until 20 January 2027. [4]
Online casinos are not affected by this rate
The 25% rate applies to physical gaming machines only. Online casino games are taxed through Remote Gaming Duty, a separate duty. The Budget makes technical changes to how Remote Gaming Duty treats free plays, prizes and tournaments from April 2027, but does not change its rate. [1]
If gambling is causing you problems, the National Gambling Helpline (GamCare) is free on 0808 8020 133.
Frequently asked questions
Which machines will pay 25%?
From 1 April 2027, any dutiable gaming machine with a maximum stake over £1 or a maximum prize over £100. Machines with stakes up to £1 and prizes up to £100 keep the 20% standard rate, and the smallest machines keep the 5% lower rate.
Does this change tax on online casinos?
No. Online casino games fall under Remote Gaming Duty, which is a separate duty. Budget 2026 only adjusts how that duty treats free plays, prizes and tournaments; the rate itself is unchanged.
Sources
- HM Treasury: Budget 2026, overview of tax legislation and rates (28 October 2026)
- HMRC: Machine Games Duty, increasing the rate on higher stake and prize machines (29 October 2026)
- HM Treasury: Budget 2026 (28 October 2026)
- HMRC: Machine Games Duty, changing who is liable for the duty (consultation, 28 October 2026)
More news
Hannah Whitmore
Hannah Whitmore writes about online casinos from a player's practical point of view: who operates a site, what a bonus really requires, which payment methods appear in the cashier, and what happens between requesting a withdrawal and receiving the money. Her reviews draw on PlayFrankCasino's own account research — registrations, terms checks, deposits and withdrawals — and she keeps an operator's advertised payout target separate from a measured result. She enjoys testing slot features and bonus-buy slots in demo mode, and is currently learning blackjack basic-strategy charts and how betting systems such as Martingale and Paroli work. She also covers UK casino news and writes PlayFrankCasino's guides to wagering, withdrawals, verification, cashback and safer gambling.