Chancellor Weighs Machine Games Duty Adjustment Ahead of Autumn Budget

Reports indicate that Chancellor John Healey is examining an increase to Machine Games Duty as part of preparations for the government's October 28 budget, and this move aims to secure extra revenue while public finances remain constrained. The Times published details of the consideration, which has drawn attention from both policymakers and the gambling sector in September 2026. Observers note that the discussion builds directly on an earlier recommendation from the Social Market Foundation think tank, which proposed raising the tax rate on Category B machines from 20 percent to 40 percent.

Details of the Proposed Tax Change

Category B machines, limited to a maximum £2 stake, currently operate under a 20 percent duty rate, and the Social Market Foundation's suggestion would double that figure to generate additional funds for the Treasury. According to the reporting, officials are assessing how such an adjustment might fit into wider fiscal planning without triggering unintended shifts in the regulated market. The proposal focuses specifically on these machines, which appear in betting shops and adult gaming centres across the country, and it ties into ongoing efforts to balance government income against expenditure pressures.

Figures from recent years show a pattern of reduced numbers of licensed premises, and the Betting and Gaming Council connects this trend to cumulative tax and regulatory costs. The council's position emphasises that growth in illegal gambling represents a measurable risk if players migrate away from taxed environments, and it urges ministers to consider enforcement implications alongside any duty revision. Those who've tracked similar tax debates note that the council's arguments centre on maintaining the boundary between regulated and unregulated markets.

Fiscal Context Driving the Review

Tight public finances form the backdrop for the chancellor's deliberations, and the October 28 budget deadline adds urgency to decisions about revenue measures. The Times report frames the Machine Games Duty review as one option among several under active consideration, while the Social Market Foundation's earlier work provides a ready reference point for rate adjustments. Researchers at the foundation have previously modelled the revenue impact of moving from 20 percent to 40 percent, and their analysis suggests the change could deliver meaningful additional income if volumes remain stable.

Yet the Betting and Gaming Council counters that volume stability cannot be assumed, and it points to historical responses where tax rises coincided with reduced participation in licensed venues. The council's statements reference specific instances of shop closures that followed previous duty or regulatory shifts, and it calls for a broader assessment of employment effects before any final policy is set. Those who've studied the sector's economics observe that the interplay between tax rates and player behaviour often determines whether projected revenues materialise.

Timeline and Next Steps

With the budget date fixed for October 28, discussions around Machine Games Duty are expected to continue through the coming weeks, and stakeholders on both sides are preparing submissions to influence the final outcome. The chancellor's office has not confirmed a decision, and the current stage remains exploratory according to the published accounts. The Social Market Foundation proposal continues to circulate as a benchmark, while the Betting and Gaming Council's warnings about closures and illegal markets form part of the record that officials will review.