Rank Group warns doubling Machine Games Duty could close a third of venues
Company says a rise from 20% to 40% would endanger about 2,000 jobs and force venue closures.
Key Takeaways
- Rank Group says doubling MGD from 20% to 40% could force closure of around a third of its venues and threaten about 2,000 jobs.
- Deutsche Bank estimates an MGD burden on Rank of about £35m a year, roughly 44% of forecast 2028 EBIT.
- Rank has closed nine bingo halls in the past year amid rising employment costs and weaker consumer spending.
- Proposals under discussion would raise Category B rates from 20% to 40%, with lower and higher tiers also increasing.
Rank Group said on 29 September 2026 that a proposal to double Machine Games Duty (MGD) in Britain from 20 per cent to 40 per cent could make around a third of its estate financially unsustainable and put roughly 2,000 jobs at risk. The operator, which owns Mecca Bingo and Grosvenor Casinos, told investors the change under consideration by Chancellor John Healey would be severe enough to force closures if enacted in the upcoming Autumn Budget.
What Rank Group says about the proposed Machine Games Duty rise
Chief executive Richard Harris described the potential tax increase as an immediate threat to the land-based business. "We have a healthy business, but if it went to 40 per cent about a third of our estate would have to close," he said, and added closures would have an impact on local communities and jobs.
Rank clarified the hardware the duty targets: MGD is levied on profits from land-based gaming machines, including fruit machines and roulette terminals. The company highlighted that the sector has already absorbed other cost pressures and tax changes, and said an MGD hike would add materially to those burdens.
Financial impact quantified by Rank and analysts
Deutsche Bank analysed Gambling Commission data and concluded Rank would be among the hardest hit of the major British operators because of its large retail footprint. The bank estimated an MGD burden on Rank of about £35m a year, equal to roughly 44 per cent of forecast 2028 EBIT and about 17 per cent of near-term EBITDA.
Across the retail sector, Deutsche Bank said gross gambling yield from retail machines stands at around £2.7bn, with Category B machines representing the largest share. Analysts modelled a scenario in which doubling the standard MGD rate would materially erode retail margins and force site-by-site viability reviews.
How the proposed rates would change for machine categories
Reported scenarios discussed in public debate would raise Category B slot machine rates as follows:
lower tier from 5% to 10%
standard tier from 20% to 40%
higher tier from 25% to 50%
The proposal under discussion would leave the rate for Category C machines unchanged. Category B devices, which can pay out up to £500, are common in betting shops, arcades and bingo halls.
Recent tax and cost context for Rank Group
Rank noted it has already closed nine bingo halls over the past year as it contends with higher employment costs and weaker consumer spending. The company said increased National Insurance contributions and broader expense growth have tightened margins.
Last year’s Autumn Budget removed Bingo Duty, previously charged at 10 per cent, which Rank said provided some relief. The group also faces the effects of online tax changes: British Remote Gaming Duty for online casino games and slots rose from 21 per cent to 40 per cent in April, and duty on online betting is scheduled to rise to 25 per cent from April 2027.
Wider industry reaction and political context
Chancellor John Healey has been reported to be considering an MGD increase that some analysts say could raise up to £450m for the Treasury. The proposal has drawn public responses across the sector.
The industry lobby group Betting and Gaming Council launched a campaign under the slogan Back Our Betting Shops to highlight the sector’s community role and contributions to local economies. Fred Done, founder of BetFred, said his firm would be forced to close 495 betting shops, costing 2,575 jobs and reducing tax revenues by £67m within a year of a major MGD hike. Paddy Power co-founder Stewart Kenny criticised Done’s projection as exaggerated.
"Jobs would be at risk and it would have a big impact on local areas by hitting workers, but losing bingo halls would have a social impact, too," Richard Harris said. — Richard Harris, Chief Executive, Rank Group
What operators and suppliers should consider now
Operators with substantial retail exposure face the hardest immediate decisions: site-level profitability reviews, potential closures, and workforce planning. For suppliers and platform vendors, demand for operational modelling and retail optimisation tools will rise as companies run viability scenarios and cost-reduction plans. Coverage of regulatory changes and industry campaigns can be found in our /regulation section and operator reaction in /news.
Rank's warnings underscore a broader policy trade-off: the Treasury’s choice of retail-machine taxation levels will directly influence the number of physical venues that remain viable and the scale of local employment in those communities. The group has framed its message for policymakers around the social as well as financial effects of venue closures.
Outlook and immediate next steps
At this stage the proposal remains under consideration; no final Treasury decision has been announced. Companies with retail estates and councils that host them will be watching the Autumn Budget timeline closely. Industry lobbying, operator modelling and political debate are all likely to intensify in the weeks before any formal change is tabled.
For B2B readers assessing exposure, the immediate priorities are stress-testing retail portfolios against the Deutsche Bank scenarios, quantifying potential tax burden per site, and preparing communications for staff and local stakeholders. Our /b2b coverage will follow vendor and operator responses as they emerge.
Frequently Asked Questions
What would a machine games duty rise mean for Rank Group?
Rank Group says a rise from 20% to 40% would force around a third of its estate to close and put approximately 2,000 jobs at risk. The company highlighted that the increase would make many sites financially unsustainable given current cost pressures and weaker consumer spending.
How large is the estimated tax burden for Rank if MGD doubles?
Deutsche Bank estimated an additional MGD burden on Rank of about £35m a year, equal to roughly 44 per cent of forecast 2028 EBIT and about 17 per cent of near-term EBITDA. That analysis used Gambling Commission data and Rank's large retail footprint as core inputs.
Which machine categories would see rate changes under the proposal?
Reported scenarios would increase Category B rates: the lower tier from 5% to 10%, the standard tier from 20% to 40%, and the higher tier from 25% to 50%. Category C machine rates would not change under the discussed proposal.
What other recent tax changes have affected gambling operators?
British Remote Gaming Duty for online casino games and slots rose from 21% to 40% in April, and online betting duty is set to rise to 25% from April 2027. Last year's Autumn Budget abolished Bingo Duty, which had been charged at 10%.
Tags
About the author
Marcus Webb
Industry Deals Correspondent
Marcus Webb covers the deal flow of the gambling industry — operator strategy, M&A, market entries, and product launches from sportsbook rebrands to full platform migrations. The reports name the companies, valuations, and jurisdictions exactly as disclosed and separate the announcement from its market impact. When a group consolidates a brand or a challenger launches into a new state, Marcus Webb explains who gains, who pays, and what closes next quarter.
More from Marcus Webb
