Entain said in an update that it expects an additional £25 million ($33.25 million) annual cost from the recently announced UK machine games duty rise. Despite this, the Ladbrokes and Coral owner has kept its fiscal 2026 guidance and its 2028 cash flow target unchanged.
This week, UK Chancellor of the Exchequer John Healey announced a raise in Machine Games Duty (MGD) from 20% to 25% on higher-stakes machines, as part of the Autumn Budget.
Entain estimates the increase will add approximately £25 million a year to the costs of its UK and Ireland (UK&I) retail business before mitigation, and it expects to offset that amount in full by the end of 2028.
The company outlined the figures in a statement to the London Stock Exchange on Wednesday, the day Healey delivered the budget.
Its FY26 guidance, issued on October 15, 2026, remains in place, together with its expectation of generating £500 million ($665 million) in annual adjusted cash flow in 2028.
A three-part route to absorbing the cost
Entain plans to cover the additional cost through estate rationalization, group-wide optimization initiatives and potential market share gains. The group said it operates the strongest offering on the UK high street, and it therefore anticipates an opportunity to recapture customers while peers re-evaluate their UK market presence.
The company added that it will continue to take decisive actions to manage and mitigate the effect of the additional taxes. According to Entain, its strong fundamentals and disciplined focus on growth and optimization support its confidence in delivering strong future cash generation.
The group also stated that its diverse and globally scaled portfolio leaves it well positioned to be a long-term industry winner.
Duty on Type 2 machines climbs to 25%
Under the new measure, the duty Entain pays on gross gaming revenue (GGR) from Type 2 gaming machines in its shops will rise from 20% to 25% from April 1, 2027. The company calculated its annualized £25 million ($33.25 million) estimate from consensus forecasts for fiscal 2027 UK&I retail net gaming revenue (NGR).
Healey applied the 25% rate to machine games with stakes over £1 ($1.33) or prizes over £100 ($133). Lower-stake machines will keep their current rate, which protects pubs and seaside arcades.
From April 1, 2028, machine suppliers will also become liable for the duty on supplier-owned machines that run under profit-sharing arrangements. The government expects the two changes to raise £135 million ($179.55 million) in 2027/28 and £150 million ($199.5 million) in 2028/29.
The MGD increase adds to the online duty changes from the November 2025 Budget. Remote gaming duty rose from 21% to 40% on April 1, 2026, and general betting duty on remote betting will climb from 15% to 25% on April 1, 2027.
Entain warns of pressure on high streets and jobs
Entain said it was disappointed by the government’s decision to raise the tax burden on an already highly taxed industry. The company stated that the latest rise will have a detrimental impact on the wider industry, UK high streets, jobs and livelihoods, and that it compounds the pressures the sector has faced since what it called the disproportionate tax increases of November 2025.
The group said it believes well-balanced regulatory frameworks, including proportionate tax regimes, are critical to protecting customers, and that these frameworks also make valuable contributions to employment, local communities and tax revenues.
“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,” said Stella David, CEO of Entain.
“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,” David added.
Other operators have already cut costs. Earlier this month, Flutter said it plans to cut up to 1,400 jobs in its UK and Ireland business and cited the rise in remote gaming duty.