A new report has called on the UK government to introduce a higher tax rate for Category B gaming machines, arguing the current duty structure does not reflect the level of gambling-related harm linked to those products.
The Social Market Foundation (SMF) recommends creating a dedicated 40% Machine Games Duty (MGD) band for Category B machines, matching the rate already applied to Remote Gaming Duty. Its modelling estimates the proposal could raise between £275 million and £458 million in additional tax revenue.
Polling and Economic Case
A Survation survey of 2,047 UK adults found that 43% support higher taxes on betting shop slot machines, while 11% favour lower taxes. More than 40% of voters from every major national political party backed an increase.
Using Gambling Commission and Office for Health Improvement & Disparities data, the report estimates the annual economic cost associated with all slot machine gambling at £2.33 billion, compared with around £600 million in yearly machine gaming tax receipts.
The proposal applies to Category B machines found in betting shops, adult gaming centres (AGCs) and bingo halls. Category C machines in pubs would remain taxed at 20%, while lower-stake machines would continue at 5%.
Focus on Adult Gaming Centres
According to the report, 47% of the UK’s 1,400 AGCs are located within the country’s 20% most deprived communities. Analysis cited from The Guardian also found AGC numbers increased by 7% between 2022 and 2024, with around one-third of new venues opening in the 10% most deprived neighbourhoods.
Gideon Salutin, Chief Economist at the Social Market Foundation, said: “Our modelling shows that raising Machine Games Duty is one of the few tax rises that would actually improve the public finances twice over – once through higher receipts from the machines themselves, and again as spending shifts to sectors that generate more jobs and more tax revenue per pound. The way we’ve set it out ensures that tax is raised only on the most harmful type of slot machines, while insulating the hospitality industry entirely.
The public clearly understands this. When a plurality of supporters of every national political party back a tax rise on these machines, it’s a mandate for reform that shouldn’t be ignored by the Chancellor. Especially given that the Chancellor has already established that taxes should be raised in line with associated harms in the previous Budget.”
During a panel discussion on 30 June, SMF director Theo Bertram said: “The argument that we made last year was really that higher harm should mean higher taxes, and the Treasury adopted that principle.”
The Betting & Gaming Council questioned the report’s highest revenue estimate. Salutin responded: “Some academics find that it will not change as a result of new tax – 0%.
“Some estimate that it will change exactly in proportion with the amount that’s raised, that’s called unit elastic one. It means that if there’s a 1% increase in the price of gambling, there will be 1% decrease in activity. We know that the answer is somewhere between that.”
Source:
“2 in 5 Brits back tax hike on most harmful slot machines to boost public finances by up to £450 million”, smf.co.uk, Jul 2, 2026
The post Think Tank Urges New Duty Rate for Category B Slots first appeared on RealMoneyAction.com.