Andy Burnham's proposed overhaul of Britain's high-street slot machine industry has sent shockwaves through the sector, with a potential £460 million tax hike on the table. The move, backed by influential thinktank polling that reveals public support for such a measure, comes as Labour's leadership hopeful prepares to take the reins – and possibly the Treasury.
Known colloquially as "slot sheds," adult gaming centres (AGCs) have become a ubiquitous feature of UK high streets, with a disproportionate concentration in areas of economic deprivation. While online casinos faced a tax hike in Rachel Reeves's November Budget, AGCs continued to operate largely under the radar – until now. As potential future Chancellor, Burnham has been vocal about his concerns regarding these establishments, condemning reports of exploitation and advocating for stricter regulation.
On Monday, the Social Market Foundation (SMF) published a report revealing that 43% of respondents would back a Labour administration's decision to raise taxes on AGCs. The rapid growth of this sector has led to record takings for operators, with official figures from the Gambling Commission showing that Category B £2-a-spin slot machines contributed £600 million in tax revenue last year – a figure that could increase by an additional £275-£458 million if Machine Games Duty (MGD) is doubled from 20% to 40%, as proposed.
The impact would be far-reaching, affecting not only AGCs but also casinos and major industry players like Austrian-owned Admiral and German-owned Merkur. Merkur was fined last year following a case involving the exploitation of a vulnerable gambler. Bookmakers too would feel the pinch – although the proposal's architects aim to spare Category C and D fruit machines in pubs from increased taxation, in an effort to shield the struggling hospitality sector.
However, industry bodies have swiftly come out against the plan, with Bacta dismissing it as "fantasy economics" and predicting a reduction in overall tax revenue and job losses. The Betting and Gaming Council (BGC) also expressed opposition, stating that while they had not reviewed the report, any increase in MGD could have significant consequences for operators.