Entain will absorb £25M a year from new machine tax, keeps targets
Cost rises to 25% from 1 April 2027; company says it will offset it by 2028
Key Takeaways
- Entain estimates an annual cost of £25 million from the Machine Games Duty rising to 25% in April 2027.
- The company maintained its 2026 guidance and its £500 million adjusted annual cash-flow target for 2028.
- Entain plans to fully offset the additional cost before the end of 2028 through store changes, efficiency and market-share gains.
- The increase affects Type 2 machines with stakes above £1 or prizes above £100; suppliers will pick up the duty on some machines from April 2028.
Entain has confirmed it expects an annual cost of £25 million from the Machine Games Duty rise, but is keeping its 2026 guidance and its target of £500 million in adjusted annual cash flow for 2028. The company said it plans to fully offset that additional cost before the end of 2028 and outlined planned measures on the same day as the Chancellor of the Exchequer John Healey's budget announcement — see the company statement on [news](/news).
How the impact arrives and when it applies
From 1 April 2027 the Machine Games Duty on affected machines will increase from 20% to 25% on gross machine gaming yield for Type 2 machines. The new rate applies to machines with stakes above £1 or prizes above £100. Lower-stake machines will keep the current rate, which protects pub machines and seaside arcades.
A second change takes effect on 1 April 2028: suppliers will be responsible for the duty on machines they own that operate under profit-share agreements. The Government estimates the two measures will raise £135 million in 2027/28 and £150 million in 2028/29 — the legislative package is part of broader [regulation](/regulation) updates.
Entain's plan to mitigate the cost
Entain attributed the £25 million ($33.25 million) figure to its UK & Ireland retail business before mitigation, using consensus forecasts for retail net gaming revenues for the 2027 year. Its measures include:
changes to the physical store network and rationalisation of the retail estate
group-wide operational efficiency initiatives
efforts to win market share if competitors scale back UK operations
The company described its high-street offering as the strongest in the market and expects that position to help recover some of the tax cost. Entain did not provide specific numbers on closures or redundancies in its update.
Group reaction and sector context
The statement includes a warning about wider effects for the industry. CEO Stella David said:
"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." — Stella David
Entain argued that properly provided taxes and balanced regulation help protect customers and sustain jobs and revenue. The company also cited its international portfolio, growth plans and focus on efficiency as reasons for keeping 2026 guidance and the £500 million ($665 million) adjusted cash-flow target for 2028 — the financial outlook remains unchanged in its [b2b](/b2b) update.
In the same period, Flutter announced cuts of up to 1,400 jobs in its UK & Ireland business following the Remote Gaming Duty rise; that increase took Remote Gaming Duty from 21% to 40% on 1 April 2026. In addition, General Betting Duty on remote betting will rise from 15% to 25% on 1 April 2027.
Immediate implications
Entain calculates its measures will allow it to absorb the estimated annual impact on its retail business before the end of 2028. The company is maintaining its 2026 financial guidance and its cash-flow target for 2028.
Frequently Asked Questions
How much does Entain estimate the Machine Games Duty rise will cost?
Entain estimates an annual cost of £25 million (equivalent to $33.25 million) to its UK & Ireland retail business before mitigation, according to the statement published the day of the Autumn Budget.
When does the Machine Games Duty rise to 25% take effect?
The increase to 25% applies from 1 April 2027 and affects Type 2 machines with stakes over £1 or prizes over £100.
What measures will Entain use to offset the tax cost?
Entain says it will rationalise its retail estate, implement group-wide efficiency initiatives and seek to gain market share if competitors pull back; it did not provide concrete figures on store closures or job cuts.
Does Entain still maintain its financial targets after the tax change?
Yes. Entain has kept its 2026 guidance unchanged and reaffirmed its target of £500 million in adjusted annual cash flow for 2028, citing its international portfolio and focus on efficiency.
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About the author
Emilio Navarro
Industry Technology Correspondent
Emilio Navarro covers the cross-cutting technology and business of iGaming — platforms, data and AI, compliance tooling, affiliate marketing, financial results, and the stories that fit no single rubric. The reports open with the announcement, cite vendors and figures exactly as published, and keep a healthy distance from press-release language. When a supplier unveils a new engine or the advertising rulebook changes, Emilio Navarro reports what genuinely changes.
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