Entain criticises UK rise in machine tax and quantifies impact at £25m

Entain has submitted a formal response to the UK Government’s budget, saying it is disappointed by the announced gambling tax increase. The key change is the rise in Machine Gaming Duty (MGD) from 20% to 25% effective 1 April 2027; the company calculates an annualised cost of approximately £25m to its retail business in the UK and Ireland before mitigations. Stella David, Chief Executive Officer of Entain, said: “This is another disappointing decision by the Government. The previous gambling tax increases announced in November last year have already had detrimental consequences across the industry, with the effects being felt by employees, communities as well as customers. These additional tax changes will further compound that damage and push more people into the growing illegal market. We will continue to work hard to limit the impact of these changes on our business, our people, and the communities in which we operate. Our priority is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets.”

How the MGD rise hits the business

The Machine Gaming Duty taxes gross gaming revenue generated by Type 2 machines in retail betting shops. The increase from 20% to 25% is the fiscal measure Entain identifies as the main source of extra pressure on its physical business. Entain quantifies the direct effect at £25m per year before any mitigation; that figure covers its operations in the UK and Ireland.

Mitigation plan and financial outlook

The company has announced a strategy to offset the impact using estate rationalisation, operational optimisation initiatives and the potential capture of customers from competitors reducing their physical footprint. Entain expects to fully neutralise the additional tax cost by the end of 2028. Despite these changes, the firm leaves unchanged its guidance for fiscal 2026 and its goal of generating £500m of adjusted annual free cash flow by 2028.

Sector risks and the CEO’s point

Entain warns of the cumulative effect of further tax increases on jobs, communities and high-street presence. The company argues that ongoing rises could push players towards the illegal market; that warning was central to Stella David’s public comment in the company note.

Operational context and next steps

Entain says its high-street leadership position allows it to benefit from potential market reordering in the physical channel. Execution of mitigation depends on estate decisions and the effectiveness of operational optimisations in 2027 and 2028. The company also reiterated its commitment to protect jobs and maintain a sustainable retail presence while adapting to the new tax burden.