UK MGD Increase Raises Concerns Over Illegal Gambling Market

Highlights

• The UK government has increased Machine Games Duty (MGD) to 25%, creating additional financial pressure on gambling operators.
• Industry representatives warn that higher taxes could accelerate customer migration towards unregulated gambling platforms.

The UK gambling industry has raised concerns about the recent MGD increase from 20% to 25%, warning that higher taxes could drive customers towards illegal gambling platforms. 

Although the increase was lower than the 40% rate some industry participants had feared, operators and industry experts remain concerned about its financial impact. 

The additional duty comes alongside several other tax and regulatory changes affecting both online and land-based gambling businesses.

In the previous budget, remote gaming duty (RGD) increased from 21% to 40%. Furthermore, the general betting duty for remote betting is scheduled to rise from 15% to 25% next year. 

Industry representatives argue that the combined effect of these changes could significantly reduce operator profitability.

Dan Waugh, partner at advisory firm Regulus, warned that the increased tax burden could contribute to further venue closures and job losses. He also questioned whether frequent changes in fiscal policy could discourage potential investors from entering the UK gambling market.

Legal expert Bethan Lloyd, partner at Wiggin, similarly highlighted the pressure on operators, particularly businesses already operating with limited profit margins. 

Experts warn that legal operators reducing marketing expenditure could make offshore platforms more attractive to consumers.

The industry is therefore calling for stronger enforcement and better coordination among regulators, payment providers and advertising platforms to protect the regulated market.

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