UK budget raises slot machine tax to 25% as £100 vanishes in minutes

A Guardian reporter watched £100 disappear in roughly five minutes on a slot machine in Peterborough, one of the high-street venues targeted in this week's budget by the chancellor, John Healey.

Healey raised machine games duty — the tax levied on slot machines — from 20% to 25%, a change he said would raise nearly £150m a year and amounted to "raising taxes on gambling to support good growth on every high street". The increase follows a year in which gamblers in Great Britain lost £2.7bn on slot machines, nearly double the annual budget of the Department for Culture, Media and Sport, which oversees the sector.

How the machines work

The most popular terminals are category B3 machines, which allow a £2 stake every 2.5 seconds and a jackpot of up to £500. A £2 maximum stake sounds modest, but losses accumulate quickly: in the Guardian's test, £100 was gone in five minutes. Each machine earns £40,000 a year on average, more than the median pay of a British worker.

Slot machines appear in bookmakers, casinos and bingo halls, but the venues that pack them in are adult gaming centres (AGCs), sometimes called slot farms. They sit on most British high streets and are disproportionately concentrated in poorer areas. On some streets, such as the stretch in Peterborough, almost every shop is a bookmaker or an AGC.

The two biggest operators are Admiral, owned by an Austrian billionaire, and Merkur, owned by a German billionaire. Both have pursued UK growth in recent years. Andy Burnham has accused such venues of "targeting some of the most vulnerable in our communities". In 2025, Merkur was fined £100,000 after the Guardian revealed it had allowed an older woman with terminal cancer to run up large losses over two spells lasting 16 hours.

Kept playing

Critics point to features that keep customers spending. Most venues open 24 hours a day, and the Guardian has previously reported that staff receive bonuses linked to customers' losses, undermining their incentive to intervene. Newer "super slot" machines offer a comfy armchair and a 65-inch immersive screen, with drinks, snacks, prize draws, free-spin offers and in-shop cash withdrawals. Some punters play more than one machine at once; Admiral has introduced a two-machine limit it says is designed to reduce harmful gambling. Many venues operate under bingo licences, though most have a single bingo machine that is rarely used.

Machines have a fixed "return to player", so regular players always lose. That makes slots a predictable income source for operators — and a tempting target for a tax rise.

Bookmakers say the duty increase will cost them money and lead to shop closures, with Entain, which owns Ladbrokes, expecting a £25m hit. Yet shares in the listed operators Entain, the William Hill owner Evoke and the Grosvenor Casinos owner Rank Group rose sharply after the budget, as investors had feared a 40% rate. AGCs were also excluded from business rates relief, at a combined cost of £10m, but low overheads and round-the-clock opening leave them well placed to thrive.

Neither Admiral nor Merkur responded to a request for comment. Bacta, the slot machine trade body, said its members' venues were "among the safest places to gamble", with experienced staff able to identify problems, and that games were low-stake, tightly regulated and a longstanding part of the high street.

Source: The Guardian Business.