Entain says UK gambling tax rise will cost £25m to retail in 2027

Entain has criticised the UK Government’s budget decision to raise Machine Gaming Duty (MGD), saying the change will cost the group's UK and Ireland retail operations around £25m of annualised pre-mitigation expense from 1 April 2027. The operator told investors it expects to neutralise that hit through estate rationalisation, operational optimisation and customer recapture, with a full offset targeted by the end of 2028.

What changed and when

The UK Government will increase Machine Gaming Duty from 20% to 25% with effect from 1 April 2027. MGD is charged on Gross Gaming Revenue generated by type two gaming machines in betting shops. Entain calculated the higher rate will produce an additional annualised cost of approximately £25m for its UK and Ireland retail estate before any mitigating actions.

How Entain plans to respond

Management said the group will pursue a mix of measures to protect margins and jobs. Those measures are: estate rationalisation across its high-street estate, group-wide operational optimisation initiatives, and the potential to recapture customers from competing operators who reduce or exit retail footprints. Entain expects these actions to fully offset the tax impact by the end of 2028.

The group reiterated its existing guidance for FY26 and confirmed its long-term target to generate £500m in annual adjusted cash flow by 2028 remains unchanged.

"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," said Stella David, Chief Executive Officer of Entain. "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."

Wider context and company position

Entain framed the response as both commercial and defensive. The company said it remains committed to protecting physical high-street venues and to taking "decisive action" where regulatory headwinds threaten retail viability. Management pointed to the group's diversified global portfolio and commercial fundamentals as the basis for maintaining its targets despite the new fiscal measure.

Entain's statement names the UK Government as the policy maker and cites the MGD adjustment as the direct fiscal mechanism. The group quantified the retail impact at £25m annually before mitigation, kept FY26 guidance unchanged, and reaffirmed the £500m adjusted cash flow goal by 2028.

What to watch next

Market participants will monitor how quickly Entain begins estate changes and whether competing operators alter their retail strategies, creating opportunities for customer recapture. Regulators and policymakers will likely receive further lobbying from industry bodies concerned about retail jobs and footfall on high streets.