Bookmakers and racing braced for Budget as rise in Machine Games Duty threatens high-street shops

Bookmakers and the British Horseracing Authority in the UK warned this week they face fresh financial risk ahead of Wednesday’s budget as ministers consider raising Machine Games Duty. The possible change has prompted fears about the future of thousands of high-street betting shops and the knock-on effect on racing’s income.

Racing had secured an exemption from a (modest) hike in betting day in 2025 after lobbying MP Rachel Reeves, but officials are again preparing for a Budget that John Healey is widely expected to use to adjust Machine Games Duty (MGD). The Social Market Foundation’s June report proposed doubling the duty on high-street gaming-machine profits from 20% to 40%, citing higher rates of harm linked to machine gaming than to conventional racing and sports betting.

The gambling sector rapidly contested the SMF proposal, citing analysis from Regulus Partners that warned as many as 4,000 of the UK’s 5,500 betting shops could be forced to close over the next three years if the higher rate were adopted. Regulus estimated that such closures could remove about £92m a year from racing — described by the industry as roughly a third of its income from betting — and the BHA issued a stark statement on the potential impact.

“This would have devastating consequences for British racing,” Greg Swift, the BHA’s director of communications and corporate affairs, said in a statement earlier this month, “hitting prize money, Levy funding and our ability to continue investing in our world-leading equine welfare and veterinary research projects.” Subsequent speculation ahead of the Budget suggested Healey might instead opt for a smaller rise from 20% to 25%, a move that the gambling industry says could still trigger hundreds of shop closures and cost racing tens of millions in revenue.

Longstanding debates over the high-street sector’s decline have resurfaced, with critics noting the sector has been predicted to contract many times since the growth of online gambling and the campaign to reduce maximum FOBT stakes. When the stake on fixed-odds betting terminals was cut from £100 to £2, prior warnings that most shops would quickly close proved wide of the mark.

The retail estate now numbers about 5,500 shops, down from roughly 9,000 around a decade ago, a contraction the article links to a broader shift towards online gambling, particularly among younger people. Racing’s financial model remains sensitive to retail closures because media-rights contracts for live pictures and data are negotiated on a per-shop basis; Regulus calculates the sport receives about £27,000 in media rights and Levy payments from the average shop’s annual revenue of £440,000.

The piece also critiques choices within the betting industry, arguing that operators transformed the traditional betting shop by maximising the number of four FOBTs per outlet and concentrating many shops in high-density areas, a strategy described in the article as having plundered local communities through casino-style gaming. It cites an example from the mid-2010s when one Hackney high street contained 18 betting shops.

During the debate over FOBT limits, the British Horseracing Authority sided with industry warnings about closures while Matt Hancock, then culture secretary in 2018, consulted on reducing the maximum stake to £2. The article states that racing largely remained on the sidelines as the FOBT controversy unfolded and continued to benefit from media-rights revenue.

The immediate development to watch is Wednesday’s Budget, which will reveal the government’s decision on MGD. The article concludes that racing, having done little to oppose the growth of casino-style machine gaming, “can have few genuine grounds for complaint if, after Wednesday’s budget, it continues to pay the price for its complicity.”