90 Labour MPs urge MGD rise on Category B machines

A push is under way among Labour MPs for a tax rise on Category B gaming machines. Roughly 90 of them want John Healey, the Chancellor of the Exchequer, to lift Machine Games Duty to 40 per cent when the Autumn Budget is delivered. Halesowen MP Alex Ballinger is heading the effort and made the case in a letter to the Chancellor. Gordon Brown, a former prime minister, has come out in favour of the plan as well.

Ballinger cited a report published in June by the Social Market Foundation, a think tank that had also advocated the gambling tax rises announced the year before. According to that report's estimate, raising the MGD rate would bring in £275m to £458m more in tax each year. Category B devices, capable of paying out up to £500, are the kind of electronic gaming machine seen most often in UK betting shops, arcades and bingo halls. Their duty is currently charged in tiers: "5 per cent on stakes up to 20p, 20 per cent on stakes up to £5, and 25 per cent on stakes above £5."

Ballinger further contends that adult gaming centres are found in deprived communities at a rate out of proportion to their share of the population. He said: "47 per cent are located in the most deprived fifth of the country, while the most deprived local authorities have more than six times as many per head as the least deprived". He also cited a government review of Category B3 machines, which drew on Gambling Commission evidence. That evidence indicated that people who play high-stake, high-prize machines are among those most inclined to seek help from gambling support services, that problem gamblers use gaming machines more often than players with fewer difficulties, and that they devote comparatively more time and money to the machines.

The plan would leave pub fruit machines untouched by any MGD rise, since the higher rate would fall on Category B machines alone, and bingo would keep its duty-free status. Ballinger said: "This targeted Labour reform would protect communities from harm, require fair contributions from the broadest shoulders, and back high streets creating opportunity and retaining wealth. Pubs would pay no more, bingo games would stay duty-free and lower-category machines would remain protected."

Industry representatives have warned that a rise in MGD could put venues at risk. Nicole Garrett, chief executive of The Bingo Association, said bingo operators continue to rely heavily on machine revenues even though bingo games themselves would remain exempt. The gaming hall association Bacta and the Betting and Gaming Council are both lobbying against the proposed increase, and the Betting and Gaming Council is running a campaign called Back Our Betting Shops.

Fred Done, who founded Betfred, has said that a doubling of MGD would mean high-street bookmakers vanish by 2030. Rank Group, for its part, warns that it could be compelled to shut a third of its venues. A letter objecting to possible increases has drawn signatures from more than 1,000 people in the greyhound racing sector.

According to reports, one option under consideration by the government would double MGD on Category B slot machines. In that scenario, the lower tier would climb from 5 per cent to 10 per cent, the standard tier from 20 per cent to 40 per cent, and the higher tier from 25 per cent to 50 per cent. Category C machines would be unaffected.