Rank Group warns of mass closures if Machine Games Duty rises in the UK

Rank Group has warned that a significant increase in the Machine Games Duty (MGD) in the UK could force it to close nearly 2,000 jobs. The group, which owns Mecca Bingo and Grosvenor Casinos, issued the warning after reports emerged that the UK Government is considering doubling the MGD rate from 20% to 40% in the Autumn Budget.

The call to the Government and the debate over the increase in Machine Games Duty

The proposed increase in the Machine Games Duty has been put forward by the Social Market Foundation and former Prime Minister Gordon Brown as a measure that could generate up to £450m additional for the Treasury if the standard rate is raised to 40%. It has been confirmed that Chancellor John Healey is considering that scenario. Rank Group has been explicit in its response: many of its venues, according to its CEO Richard Harris, would become financially unsustainable with such a hike.

"If it were at 40 percent, around a third of our network would have to close," said Richard Harris, adding that the closures would hit workers and local communities.

What the proposed increase in MGD would technically mean

The Machine Games Duty taxes the profits generated by land-based gaming machines: fruit machines, roulette terminals, and other devices. Currently, taxation on Category B machines is tiered: 5% on stakes up to 20p, 20% on stakes up to £5, and 25% on stakes above £5. According to published reports, the proposal includes doubling those rates in Category B—raising the 5% to 10%, the 20% to 40%, and the 25% to 50%—while the Category C rate would remain unchanged.

Deutsche Bank has analyzed data from the Gambling Commission and concludes that Rank Group would be the most exposed operator due to its greater retail presence. The bank estimates an additional MGD burden for Rank of approximately £35m per year, a figure that would correspond to around 44% of the projected EBIT for 2028 and 17% of short-term EBITDA.

Operational impact and existing costs at Rank Group

Rank Group has noted that in addition to the fiscal risk, it faces cost pressures on several fronts: increases in National Insurance contributions, rising labor costs, and weaker domestic consumption. In the last year, the group has closed nine bingo halls in response to these factors.

The group also recently benefited from a measure that affected its tax burden: the Bingo Duty, which previously taxed at 10%, was eliminated in the last Autumn Budget.

Industry reactions and alternative calculations

The industry lobby, Betting and Gaming Council, has launched campaigns to defend the local contributions of betting shops and gaming halls. Other operators have published their own estimates of the damage that a rise in the MGD would cause. Fred Done, founder of BetFred, stated that his company would have to close 495 venues, resulting in the loss of 2,575 jobs and a reduction of £67m in tax revenue in the first year after a drastic increase. Stewart Kenny, co-founder of Paddy Power, described Done's figures as "familiar scaremongering."

The sector has already experienced tax increases in the last year: the British Remote Gaming Duty, which taxes online casino games and slots, rose to 40% in April; and the rate on online betting will increase to 25% starting in April 2027.

Magnitude of the retail machine market and consequences for operators

Deutsche Bank estimates the Gross Gambling Yield from retail machines to be around £2.7bn, with Category B machines representing the largest portion of that total. For operators with a wide physical network, this flow is a material part of their profit and loss account.

For Rank Group, an additional annual burden of close to £35m would directly impact the profitability of its venues, which already operate with tight margins due to competition and labor costs. The result would be selective closures, reduced local activity, and job losses in communities where Mecca Bingo and Grosvenor Casinos are significant employers.

Regulatory and public policy implications

The debate lies at the intersection of tax collection and the sustainability of the retail gambling fabric in the UK. Advocates of the increase argue for its revenue-generating potential and equity in taxation; operators maintain that such a measure would shift activity to unregulated markets or erode the physical supply of the sector.

For readers interested in the regulatory framework and its impact on operations, this issue is directly related to trends in /regulation and the ongoing conversation between operators and legislators that will continue until the Autumn Budget.

What investors and suppliers should monitor

Investors and technology suppliers should monitor three specific variables: the final decision of Chancellor John Healey in the Autumn Budget, the exact size of the MGD increase approved, and the operational impact projections published by major banks and institutions (such as the analysis from Deutsche Bank cited). For platforms and B2B suppliers, venue closures would change the demand for omni-channel solutions and services that add margin to non-MGD revenues, aspects that affect contracts and business planning /b2b.

Rank Group has placed its warning at the center of the fiscal debate. The Government's decision will determine whether the threat of mass closures and job losses becomes a reality or remains a negotiation pressure between the Treasury and the sector.