The Chancellor’s 2025 UK Budget is out, and it comes with important news for pubs, clubs, and venues that host gaming or amusement machines. In plain English, we’ll break down what the latest gambling tax changes mean for your business. Machine Games Duty (MGD) – the tax you pay on fruit machines and other gaming machines – is front and center, alongside other gambling duties like betting and remote (online) gaming taxes. Here’s the straight talk on how the Budget could affect your pub’s machine income and what to do about it.
Machine Games Duty – No Tax Hike (A Relief for Pubs)
Good news: the Budget did not increase Machine Games Duty. MGD remains at 20% (the standard rate on gaming machine profits) – no new hike was announced. This is a massive relief for pub and venue operators. Why? There had been loud industry fears that MGD might jump to as high as 50%, which would have been devastating for pubs.
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MGD stays at 20% – meaning the tax on your pub’s fruit machine takings is unchanged. You won’t be handing a bigger cut of your machine income to the taxman this year.
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A dodged bullet for venues – Trade bodies warned that a jump to 50% MGD could push many pubs over the edge. The British Beer and Pub Association (BBPA) estimated each gaming machine earns a pub about £9,000 a year, and a 50% duty could have added £187 million in extra taxes across the sector.. In many pubs, that machine income is the difference between staying viable or closing up shop.
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“Win for in-person gambling” – The decision to freeze MGD rates is being seen as a win for the physical hospitality sector. After all the lobbying and worry, pub owners and amusement operators are “very relieved” not to face a higher MGD bill.
What this means for you: If you have a fruit machine or other gaming machines in your pub, your tax situation stays steady. There’s no new hit to your share of the machine’s profits. You won’t need to adjust game prices, reduce payouts, or renegotiate machine hire agreements purely due to tax. In short, the revenue your pub gets from that fruit machine hire stays as predictable as before – a welcome bit of stability in an otherwise tough climate.
Government Focus on Online Gambling (Not Pubs)
The 2025 Budget’s big gambling tax moves targeted online gambling, not the local pub. The Chancellor explicitly focused on remote gaming (online casinos and slots) as being higher-harm and lower-overhead – and therefore ripe for higher taxes. Here are the key changes in other gambling duties that were announced, and how they might (or might not) affect venue owners:
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Remote Gaming Duty doubled: Online casino games and slots will be taxed at 40% (up from 21%) on their profits from April 2026. This massive increase hits online operators, not pubs. It was aimed at internet gambling sites rather than fruit machines in your venue. While it doesn’t directly cost you anything, it shows the government is putting the squeeze on online gambling rather than in-person play.
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Online betting duty up, in-person betting unchanged: For online sports bets (remote betting), the duty will rise from 15% to 25% – but not until April 2027. Crucially, any bets placed in person (e.g. in high-street betting shops or via self-service betting terminals on licensed premises) stay at 15%. In other words, the tax on a bet placed in a bookmaker’s shop or venue isn’t changing. Most pubs aren’t bookies, but if you happen to have a betting terminal or host a bookmaker on-site for events, there’s no new tax burden on those in-person bets.
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Bingo Duty scrapped: In a surprise move, the government is abolishing Bingo Duty (10%) from April 2026. This is great news for bingo halls and any venue running bingo games. If your pub or club hosts a regular bingo night or uses a bingo machine, from 2026 you won’t pay the 10% duty on those proceeds. That could mean more prize money for players or more revenue retained by you – a boost for community events that draw in customers.
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No new taxes on other gaming: There were no changes to Lottery Duty (stays the same) and no new taxes on amusements. The Budget even froze the tax bands for casino gaming (which only affects large casinos). The clear pattern is that brick-and-mortar venues were spared any new gambling taxes. The government recognised that land-based operations have higher costs and contribute to communities, so they kept taxes flat for the likes of pub machines and high-street betting.
In summary, the taxman is hitting remote (online) gambling much harder than the local pub or club. For hospitality businesses, there’s no new gambling duty to worry about in this Budget – and even a small break on bingo.
How These Changes Affect Your Pub’s Machine Income
So what does all this mean for your pub’s day-to-day and bottom line? Here’s the real-world rundown:
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Stable machine profits: With Machine Games Duty unchanged, you keep the status quo on your gaming machine earnings. Typically, MGD is taken from the machine’s gross profits (coins in minus winnings out) before you split revenue with your machine supplier. Keeping MGD at 20% means neither you nor your supplier lose any additional share to HMRC. Your pub fruit machine hire remains just as profitable as before the Budget.
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No price hikes needed: You won’t have to hike up the cost per play on your fruit machines or adjust payout settings to cover a bigger tax bite. The playing experience and pricing for your customers can stay friendly and fun – which is good for encouraging play and increasing dwell time. In other words, gaming machine hire continues to be a straightforward way to increase venue revenue without new tax complications.
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Confidence in keeping or adding machines: If you were on the fence about installing a new fruit machine or SWP (skill with prizes) quiz machine, the tax stability should give you confidence. The government essentially signaled that pubs and clubs aren’t the target for revenue grabs in gambling – they even see value in our sector’s entertainment offering. Many pubs rely on a few extra grand from machines each year, and now you know that revenue stream won’t be suddenly shrunk by a tax change.
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Bingo nights and promotions: With Bingo Duty due to vanish in 2026, consider how you might take advantage. Some pubs run weekly bingo or raffle-style games to draw a crowd. Come next April, any proceeds from in-venue bingo will be tax-free, meaning you could offer bigger jackpots or simply enjoy a higher margin on these events. It’s one more way to entertain your regulars and boost takings mid-week, without the taxman taking a cut.
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Online vs on-site play: The gap between online gambling and on-site entertainment is widening in costs. Online operators will likely tighten offers, reduce bonuses, or raise house edges to cope with nearly double the tax. This might make a simple flutter on the pub’s fruit machine or a bet in-person relatively more attractive to some customers. While we’re not suggesting a mass migration from smartphones to the bar stool, it’s worth noting that your venue’s leisure offerings now have a slight edge – they aren’t being squeezed by new taxes like the online apps are. Use that in your promotions: highlight the fun of playing a pub fruit machine or quiz machine in a social setting, with fair odds and jackpots, as part of the unique pub experience.
Bottom line: the 2025 Budget doesn’t throw any new hurdles at your pub’s gaming income. On the contrary, it reinforces that in-person hospitality venues are valued, with stable taxes letting you plan ahead. In a year where energy costs, wages, and beer duties might be on your mind, at least the gaming machines in the corner can continue to earn their keep without a bigger tax drain.
Next Steps: Boosting Your Venue’s Revenue (Post-Budget)
With the tax picture settled, now is a smart time to maximize the benefit you get from amusement and gaming machines in your venue. Here are a few practical moves to consider to increase your venue revenue after the Budget:
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Review your machine mix: Do you have the right machines for your crowd? Whether it’s a classic fruit machine, a digital gaming machine, a jukebox, or a quiz machine, the right entertainment can keep customers on premises longer and spending more. Since machine games duty is holding steady, all the extra play you generate goes towards your bottom line (after the usual split) without any new tax drag.
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Upgrade or add a machine: Newer machines with popular game content or cashless payment options can attract more play. If you’ve been hesitating on fruit machine hire or thinking about an extra unit, the stable duty rate means your return on that investment is as good as it gets. Many pub operators find that a well-placed gaming or amusement machine pays for itself by boosting weekly takings.
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Promote the fun (responsibly): Let your customers know about your machines and any jackpots or new games. A simple chalkboard sign about the £100 jackpot on the fruity, or a weekly high-score challenge on the quiz machine, can spark interest. Customers who might skip another expensive round of drinks could still drop a few pounds into a machine for entertainment – generating revenue for you. And with no new taxes, you don’t have to tighten the odds or raise prices to make the same profit. It’s all about driving usage and enjoyment.
Finally, remember that gaming machines are meant to enhance your venue’s atmosphere and profits, not complicate them. The 2025 Budget has essentially green-lit the continuation of pub gaming as a viable income booster. Take this opportunity to lean into that advantage.
Ready to level up your pub’s entertainment and earnings? Diamond Leisure is here to help you make the most of it. We have decades of industry experience in pub fruit machine hire and revenue sharing. Our team can advise on the best fruit machines or amusement games for your customer base and set you up with hassle-free installation and support. Don’t let that corner of the bar gather dust – put it to work earning extra cash for your venue. Get in touch with Diamond Leisure and see what machines could earn more in your venue.