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Machine Games Duty Draft Sparks Tax Debate Ahead of Budget

Machine Games Duty Draft Sparks Tax Debate Ahead of Budget

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SMF draft leak fuels tax debate ahead of Budget

The Social Market Foundation’s (SMF) draft report on Machine Games Duty (MGD) surfaced on 23 October 2026, complete with internal staff comments. The leak came a day before the Chancellor’s Budget, when a 40% MGD rate is widely expected. The draft shows senior SMF staff questioning the certainty of job-loss claims and the causal link between machines and crime.

Draft reveals internal doubts

The leaked document, titled Addressing the Harm, was published by Guido Fawkes, a Westminster gossip site known for leaks. The draft still carried margin notes from SMF director Theo Bertram. Bertram asked the authors for evidence that workers displaced by higher MGD would find new employment. Chief economist Gideon Salutin replied that national employment would grow but individual guarantees were absent. Bertram also warned against overstating causality between machines and crime; Salutin amended the wording from “causal” to “correlation.”

Industry backlash

Greg Knight, CEO of Jenningsbet, slammed the SMF as “totally discredited” on LinkedIn, accusing the think-tank of using tax as a smokescreen to push for gambling abolition. Carl Templeton-Smith of CTS Retail & Equine Consulting called the leak a “damning indictment of policymaking” and noted that MPs had relied on the report’s foreword, written by Labour MP Alex Ballinger. Helen Walton, founder of G.Games, suggested that some data producers knowingly present fabricated figures.

Gambling Commission flags evidence concerns

The British Gambling Commission (BGC) responded to City AM, saying the internal comments “raise serious questions about the evidence being used to justify further tax increases.” The BGC had previously warned that a 40% MGD could endanger up to 3,800 casino jobs, while Regulus Partners modelling estimated around 1,500 jobs at risk.

What the draft says about closures

The draft’s language on closures and job losses mirrors the published report. The final version still describes machines as correlating with gambling-related crime. The draft shows a softened causal claim, not an outright admission of no evidence. Nevertheless, the leak exposes a gap between SMF’s public narrative and internal skepticism.

Timing and political context

The leak arrived days before Chancellor John Healey’s Budget on 28 October. The Budget is expected to confirm a 40% MGD rate, following the 40% Remote Gaming Duty increase in April. The timing could be seen as a political misstep for SMF, whose stance on raising taxes has already drawn criticism.

Practical implications for operators

Operators face a potential 40% MGD hike that could increase machine operating costs by up to 20% of revenue. A higher tax could reduce profit margins, force price increases, or trigger closures. The BGC warning of up to 3,800 casino jobs at risk highlights the sector’s vulnerability. Operators must monitor licensing conditions, as higher taxes could affect licensing fees and renewal criteria.

What to watch next

The Budget will confirm the MGD rate and detail any accompanying regulatory changes. Operators should prepare for potential cost adjustments and review their compliance with KYC and withdrawal limits, especially if higher taxes trigger tighter liquidity controls. The SMF leak may prompt a review of the evidence base for future tax proposals.

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About this article

Material claims are checked against the source and supporting references below. Editorial analysis is separated from reported fact. Read our editorial standards and corrections process.

Primary topic
tax
Last reviewed
Oct 25, 2026
Original source
igamingbusiness.com
Coverage angle
Finance

Key Takeaways

  • SMF draft shows internal doubts about job loss claims
  • Industry leaders condemn the draft and question evidence
  • Gambling Commission flags evidence concerns ahead of Budget

FAQ

What is Machine Games Duty?

A tax on UK casino slot machines, currently 20% for Category B.

When is the UK Budget due?

28 October 2026.

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