UK Chancellor John Healey Weighs Machine Games Duty Rise on Category B Slots Before October Budget

UK Chancellor John Healey is reportedly considering an increase to the Machine Games Duty applied to Category B slot machines that carry a £2 stake limit, and the move comes ahead of the government budget scheduled for October 28. The Treasury is seeking additional revenue while public finances remain under pressure, and the review follows earlier recommendations from the Social Market Foundation think tank that called for doubling the existing rate from 20% to 40%.

Category B machines operate under strict stake limits that cap maximum bets at £2 per spin, and they represent a significant portion of gaming activity inside betting shops across the country. Observers note that any adjustment to the Machine Games Duty would directly affect operators who rely on these terminals for revenue, while the timing aligns with broader efforts to balance the national accounts before the autumn fiscal statement.

Background on the Proposed Tax Adjustment

The Social Machine Games Duty currently stands at 20% of gross profits from these machines, and the think tank proposal would raise that figure to 40% if implemented in full. Reports indicate that Treasury officials have begun internal discussions about the change, although no final decision has been confirmed at this stage. The Chancellor’s team continues to evaluate multiple revenue options as spending pressures mount in other areas of government.

Betting shops that host these machines have already experienced several rounds of regulatory change in recent years, and further tax increases could compound existing cost pressures. Data from industry monitoring shows steady consolidation within the high-street sector, with some locations closing after successive policy shifts.

Industry Response and Stated Concerns

The Betting and Gaming Council has voiced strong opposition to any duty increase, and it warns that higher taxes could accelerate shop closures while reducing employment in the sector. Council representatives argue that elevated costs might also push some activity toward unregulated operators, although the government has not released its own assessment of that risk. A Treasury spokesperson declined to comment on the specific rumors circulating in September 2026.

Operators maintain that Category B machines already contribute substantial tax revenue under the current 20% rate, and they point to existing compliance costs associated with responsible gambling measures. The Council has highlighted figures showing declining numbers of betting shops over the past decade, and it suggests further tax pressure could quicken that trend.

Timeline and Budget Context

The October 28 budget date sets a firm deadline for any policy announcements, and the Machine Games Duty review forms part of wider Treasury work on gambling taxation. John Healey took up the Chancellor role earlier in the parliamentary term, and his department continues to examine multiple revenue streams amid constrained fiscal headroom. The September 2026 discussions occur against a backdrop of ongoing monitoring by the Gambling Commission, which oversees machine standards and operator compliance.

Those who track gambling policy note that previous duty adjustments have required detailed impact assessments before implementation, and the current consideration appears to follow a similar internal process. No draft legislation has been published yet, and stakeholders await further details in the run-up to the budget statement.

Stakeholder Positions

Government sources indicate that all tax options remain under active review, while industry groups continue to submit evidence on potential economic effects. The Social Market Foundation’s earlier report provided one set of calculations supporting the 40% rate, yet the Treasury has not endorsed those findings publicly. Betting and Gaming Council statements emphasize employment data from betting shops and argue that tax stability supports continued investment in regulated venues.

Local authorities that license premises have also watched the debate, because shop closures can affect high-street vitality in some towns. Figures released by trade bodies show variation in machine numbers across regions, and any duty change would likely produce uneven impacts depending on local market conditions.

Conclusion

The reported review of Machine Games Duty on Category B machines continues to develop as the October 28 budget approaches, and interested parties on both sides of the issue have stated their positions clearly. Treasury officials have not confirmed next steps beyond the ongoing internal analysis, and further announcements are expected to coincide with the Chancellor’s fiscal statement. The outcome will determine whether the existing 20% rate remains in place or moves toward the higher level proposed by external analysts.