Machine Games Duty: 90 Labour MPs urge Chancellor Healey to raise Category B rate

Ninety Labour MPs wrote to Chancellor of the Exchequer John Healey on 16 October 2026 to request a higher rate of Machine Games Duty (MGD) applied to Category B machines in the Budget due on 28 October 2026. The cross-party letter was led by Alex Ballinger, Member of Parliament for Halesowen, and frames a higher Category B rate as a “popular, targeted and proportionate” revenue measure while leaving lower-category machines, pubs and the abolition of Bingo Duty unaffected.

Machine Games Duty request and timing

The MPs submitted their letter on 16 October 2026 and published a copy via Alex Ballinger's X account the same day. The intervention asks the Treasury to introduce a higher MGD rate for Category B machines in the Budget that John Healey will deliver on 28 October 2026. The letter specifically targets B3 machines, which it describes as permitting rapid play at stakes of up to £2 and prizes of up to £500.

The letter cites a Government review of Category B machines and evidence from the UK Gambling Commission that players of high-stake, high-prize machines are among the groups most likely to contact gambling help services. The MPs link the request to tax changes in the previous year’s Budget, noting that the Government raised Remote Gaming Duty on online gambling from 21% to 40% and abolished Bingo Duty.

Why Labour MPs want a higher Category B Machine Games Duty rate

The group points to three strands of evidence in support of a higher Category B rate: revenue modelling, estimates of social harm and public opinion.

• Revenue: modelling by the Social Market Foundation (SMF) cited in the letter forecasts that a 40% Category B rate could raise between £275m and £458m per year after allowing for significant behavioural change.

• Harm: SMF modelling quoted in the letter estimates harms linked to machine gaming produce economic losses exceeding £2.3bn and downstream fiscal costs of up to £669m, arising from public spending on welfare, healthcare and the criminal justice system.

• Public opinion: the letter references a Survation poll that found 43% of people support higher taxes on high-street betting-shop slots, compared with 11% who support a reduction.

The MPs also draw attention to the geography of supply. Their letter states that 47% of Adult Gaming Centres (AGCs) are located in the most deprived fifth of the country, and that the most deprived local authorities have more than six times as many AGCs per head as the least deprived areas. The letter welcomes the Prime Minister’s announced reform of the “Aim to Permit” rule and new planning requirements for AGCs.

Current Machine Games Duty bands and the proposed change

GOV.UK guidance sets out the existing MGD structure with three bands: 5% for machines costing 20p or less to play with prizes of £10 or less; 20% for machines costing 21p to £5; and 25% for machines costing more than £5. The MPs ask for an additional, higher rate targeted at Category B machines — principally B3 — and characterise that rate as aimed at high-stake, high-prize devices rather than the lower-category machines that they say should remain outside the change.

Industry response: Betting and Gaming Council rejects the proposal

The Betting and Gaming Council (BGC) formally rejected the MPs’ request. Grainne Hurst, Chief Executive of the Betting and Gaming Council, cited EY modelling that, in the BGC’s view, suggests a rise to 40% could cost up to 16,000 jobs and leave the Treasury up to £124m worse off. Hurst also said more than 600 betting shops have closed or announced closure since the last Budget, with over 10,000 jobs lost or at risk.

"A rise to 40% could cost up to 16,000 jobs and leave the Treasury up to £124m worse off," Grainne Hurst, Chief Executive, Betting and Gaming Council.

The BGC position underscores the industry’s argument that higher onshore taxes can accelerate closures and jobs losses in the high-street estate.

Practical implications for the Budget and next steps

Chancellor John Healey confirmed the Budget date of 28 October 2026 in a letter to the Treasury Select Committee. The MPs’ letter adds a focused policy ask to the fiscal debate ahead of that delivery. If the Treasury adopts a higher Category B rate — and the SMF scenarios assume a 40% rate — the revenue estimates cited in the MPs’ letter range from £275m to £458m net of behavioural effects.

Policy implementation would need to define which subcategories of Category B machines are affected. The MPs concentrate on B3 devices in their public letter, and they underline their intention to protect pubs, to keep lower-category machines outside the measure and to maintain the abolition of Bingo Duty.

Operators, trade bodies and policy teams will be watching the Chancellor’s Budget statement for whether the Government accepts the case for a targeted Category B uplift, or instead favours alternative measures to address machine-related harms and raise revenue. Industry stakeholders have already framed the political and economic trade-offs: potential revenue versus projected job losses and shop closures.

What regulators and operators should note

Regulators named in the discussion include the UK Gambling Commission, whose evidence is cited in the MPs’ letter on player harm. For operators and advisers the questions to resolve quickly if a higher MGD rate is announced are: how the Treasury defines the affected machine types, whether reliefs or carve-outs apply to pubs or small venues, and the timetable for bringing any new rate into force.

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