Entain counts £25m cost of machine duty rise

• Entain estimates a £25m annualised pre-mitigation cost to its UK and Ireland retail arm.
• Machine Games Duty rises from 20% to 25% on 1 April 2027.
• The group aims to fully mitigate the impact by the end of 2028.

Entain expects the UK’s higher Machine Games Duty (MGD) to add around £25m a year to the cost of running its Ladbrokes and Coral shops.

Chancellor John Healey raised the rate from 20% to 25% in the Budget on 28 October, and the group aims to offset the full amount by the end of 2028.

What has changed

MGD is the tax operators pay on takings from gaming machines in betting shops, casinos and bingo venues. From 1 April 2027, the rate on higher-stake machines rises from 20% to 25%.

According to the Treasury’s Budget document, the new rate covers machine games with stakes above £1. Pubs and seaside arcades are excluded.

Before the Budget, the industry had braced for a rise to 40%, as our Budget coverage showed. The final rate is well below that, but it still adds a fresh cost to a retail sector already shrinking.

The bill for Entain

In a stock exchange statement, Entain put the extra cost at £25m a year before any mitigation. The figure falls on its UK and Ireland retail division and is based on consensus forecasts for that division’s 2027 revenue.

Entain called the decision disappointing. It argued the industry is already highly taxed and still absorbing the online duty rises announced in November 2025.

Stella David, CEO of Entain, said:

“This is another disappointing decision by the Government. The previous gambling tax increases announced in November last year have already had detrimental consequences across the industry, with the effects being felt by employees, communities as well as customers. These additional tax changes will further compound that damage and push more people into the growing illegal market.”

Closing the gap

Entain plans to cover the £25m in three ways: estate rationalisation, group-wide cost optimisation and potential market share gains. It has not said how many shops could close.

The market share point is central to the plan. Entain says it operates the strongest offering on the UK high street. It expects to win back customers as rivals reconsider their UK presence.

Some rivals are already pulling back. Evoke has closed 270 William Hill shops over the past year. Flutter has announced recent mass redundancies and its Q3 results are due on 4 November.

David added:

“We will continue to work hard to limit the impact of these changes on our business, our people, and the communities in which we operate. Our priority is to protect jobs wherever possible whilst supporting a sustainable retail presence on UK high streets.”

How markets reacted

Investors welcomed the lower-than-feared rate. Entain shares rose more than 6.5% to 482.5p during the session, the Racing Post reported. Rank Group gained more than 8%.

Entain’s FY26 guidance, reiterated in its Q3 trading update, is unchanged. So is its target of £500m in annual adjusted cashflow in 2028.

David Brohan, gaming and leisure analyst at Goodbody, said:

“While a tax increase is never welcome, a five per cent increase is at least tolerable, and should act as a clearing event for the sector.”

For the government, Treasury costings put the yield at £135m in 2027-28, rising to £150m in 2028-29. That total also includes a separate change making suppliers liable for duty on machines they own.

The wider damage

The Betting and Gaming Council (BGC) took a much harder view. Grainne Hurst, chief executive of the BGC, said:

“This is a deeply damaging decision and a blow to the thousands of workers, businesses and communities who depend on Britain’s regulated betting and gaming industry.”

The BGC cited EY modelling showing almost 9,000 jobs could be lost. The same modelling suggests almost 1,000 betting shops and casinos could close or face serious risk.

The BGC says more than 600 betting shops have closed or announced closure since last year’s Budget.

Horseracing, which earns levy and media rights income from betting shops, is also exposed. The British Horseracing Authority (BHA) warned of losses of £57m a year, in line with the upper estimate from analysts Regulus Partners.

Another April deadline

April 2027 brings two tax changes for UK operators. The new MGD rate arrives in the same month as a 25% remote betting rate, which was announced in November 2025.

Remote gaming duty already rose from 21% to 40% in April 2026.

For Entain, the online changes are the larger burden. After the 2025 Budget, it estimated an annual cost of around £200m to its UK and Ireland online business before mitigation. It later booked a £488m impairment linked to those tax rises in its 2025 results.

The retail plan now depends on two things: how many shops Entain closes, and whether Ladbrokes and Coral customers stay with the brands when their local shop goes.

Flutter’s Q3 results on 4 November may show how a major high street rival intends to respond.