UK high-street gambling urged to avoid infighting as machine games duty doubling threat looms

The UK's high-street gambling businesses face a strategic question as a possible doubling of machine games duty (MGD) from 20% to 40% hangs over the sector: whether they can defend their future without arguing that other operators' premises should bear the burden.

Nick Rust, the former British Horseracing Authority chief executive and betting industry executive, doubts that stressing differences between bookmakers and adult gaming centres (AGCs) helps either side. He says the public does not distinguish between high-street locations where machines can be played, and calls attacks on a subsector of one's own industry unhelpful. He recalls that amusement trade body BACTA attacked betting shops during the fixed-odds betting terminal debate, which in his view did not help it.

Regulus Partners estimates that doubling MGD could leave around 1,500 betting shops operating, with roughly 4,000 closures, 28,000 jobs lost and £92 million removed from racing. Its model puts average shop revenue at about £440,000 a year, split broadly equally between betting and machines, with a net cash contribution of about £44,000. A doubling of MGD would add around £45,000 in costs, wiping out that contribution. Regulus also forecasts that betting-shop MGD receipts would fall by around 32% to £155 million, undermining the revenue-raising aim. Rust finds the 1,500 figure credible, though he thinks earlier industry warnings over FOBT reforms were somewhat exaggerated. He points to general costs, media rights costs and National Insurance increases as the cause of accumulated damage.

Other voices have also entered the debate. Bingo Association CEO Nicole Barrett said machines are an important secondary income for bingo clubs, while Buzz Bingo CEO Dominic Mansour said even a 5% increase in MGD would make a third of his clubs unviable.

Consultant Vaughan Lewis, writing in The Racing Post, argues that machine income sustains shops that pay levy and media rights fees, whereas AGCs make no such payments and could capture customers displaced by closures. An anonymous industry consultant disputes this, saying category B machines cannot be treated differently by venue type and that AGCs would also struggle with a 40% rate. The consultant adds that suggesting arcades can cope risks conceding the Treasury's case for higher tax.

Rust also raises wider concerns, including the loss of community meeting places as pubs close, and the possibility that illegal gambling in pubs and clubs could resurface. He further argues that racing has relied too heavily on betting income without developing other sources of demand.