The Betting and Gaming Council Casino Group has warned that any increase in Machine Games Duty (MGD) in the upcoming Budget would undermine vital investment, threaten thousands of jobs, and reverse the benefits of the Government’s long-awaited reforms to Britain’s land-based casino sector.
This summer, the Department for Culture, Media and Sport introduced long-overdue modernisation and deregulation measures to help casinos grow and invest. These included more proportionate gaming machine allocations and permission to offer sports betting – reforms designed to enable tens of millions of pounds in new investment and support the Government’s growth agenda.
When introducing the measures, DCMS Minister Stephanie Peacock MP said the reforms would “unlock additional investment up and down the country” and “put the casino sector back on a stable footing”; while Gambling Minister Baroness Twycross praised the sector’s contribution to jobs, tax revenues, and the night-time economy, adding that modernisation could boost Gross Gambling Yield by up to £58 million.
Wipe Out
However, the BGC Casino Group has warned that a rise in MGD from the current 20 percent rate would wipe out these gains overnight.
“An increase in MGD would fundamentally undermine the sustainable footing the new reforms have created,” said Simon Thomas, Executive Chairman of the Hippodrome Casino and Chair of the BGC Casino Committee. “It would reverse progress, lead to closures, and put thousands of skilled jobs at risk.”
Following the Government’s reforms, operators had already committed to over £300 million in investment across the UK, including:
- Rank Group plc: £60 million per year for two years to modernise venues.
- Genting Casino: £40 million new casino at London’s Trocadero and £10 million refurbishment in Southend.
- Grosvenor Victoria Casino: £15 million refurbishment and expansion.
- Bally’s: £3.7 million investment in Newcastle, securing 170 jobs.
- Hippodrome Casino: £1.5 million new sports betting venue in London’s West End.
- Plus further redevelopments in Brighton, Bolton, Coventry, Leicester, Liverpool, Manchester, and Reading.
The group warns that increasing MGD would make many of these projects financially unviable. At a 25 percent rate, analysis shows that up to 40 casinos could close, costing 3,500 jobs – a third of the entire UK casino workforce.
“Casinos have only just begun to recover from the pandemic and years of economic pressure,” said Simon Thomas. “A tax rise now would derail investment plans, force closures, and damage Treasury revenues in the long term.”
Squeezed Margins
Despite recent reforms, the land-based casino sector is still 22 percent below pre-pandemic revenue levels, equivalent to a 43 percent fall in real terms. Rising costs, including wage inflation, higher employer National Insurance Contributions, and the suspension of duty revalorisation, continue to squeeze margins.
BGC CEO Grainne Hurst cautioned: “This industry supports 11,000 skilled jobs and contributes hundreds of millions in tax. Raising MGD would not raise revenue – it would destroy it, by forcing viable casinos to close.”
And Michael Kill, CEO of the Night Time Industries Association warned: “The Government’s proposed tax increases risk undermining the ability of land-based casinos to invest in becoming world-leading cultural hubs.
“Strategic investment in entertainment, hospitality, restaurants, bars and live shows is shaping casinos into future-proof destinations that will sustain jobs, energise high streets, and underpin a vibrant 24-hour economy.”
The BGC Casino Group has submitted its formal Budget representation to the Treasury, urging the Government to maintain the current 20 percent MGD rate to protect jobs, investment, and growth.
Simon Thomas concluded: “The Government’s reforms gave our industry hope and stability. [But] an increase in MGD would pull the rug from under that progress.
“The Chancellor must resist any temptation to raise this tax.”
(Main Photo: Trilby Browne/iGF ColorSpace)
