Entain Expects £25 Million Annual Cost From UK Gambling Tax Increase
United Kingdom.- 30 October 2026 | www.zonadeazar.com Entain, the international sports betting and gaming group behind Ladbrokes and Coral, has announced that the increase in the UK’s Machine Games Duty (MGD) will generate an estimated additional annual cost of £25 million for its UK and Ireland retail operations.
The company disclosed the estimate on 28 October 2026, following the UK Government’s decision to increase MGD from 20% to 25% for certain higher-stakes gaming machines.
Despite the anticipated financial impact, Entain has maintained its 2026 guidance and its expectation of generating £500 million in annual adjusted cash flow by 2028.
Machine Games Duty to Rise From 20% to 25%
The UK Government has confirmed that the new Machine Games Duty rate will take effect on 1 April 2027.
The increase will apply to machines meeting either of the following conditions:
- Maximum stake exceeding £1 per game.
- Maximum prize exceeding £100.
The duty is charged on gross gaming revenue generated by qualifying machines.
The reform will primarily affect businesses such as betting shops, adult gaming centres and certain bingo and casino premises.
Lower-stakes machines will retain their existing tax treatment.
Entain Estimates £25 Million Annual Impact
The company expects the change to generate approximately £25 million in additional annual costs, before mitigation measures.
The estimate is based on consensus forecasts for FY2027 net gaming revenue from its UK and Ireland retail division.
The higher duty will particularly affect type 2 gaming machines located in the group’s betting shops.
Entain clarified that the figure represents an estimated annualised tax impact rather than a net loss already incurred.
Ladbrokes and Coral Among Affected Brands
Entain’s retail business includes two of the UK’s best-known betting shop chains:
- Ladbrokes: an established sports betting brand operating both retail and digital services.
- Coral: a major betting operator with a significant presence on British high streets.
Both brands form part of Entain’s commercial portfolio and operate under UK gambling regulations.
The MGD increase will directly affect the profitability of certain gaming machines installed in their premises.
The company will need to assess how to absorb the additional tax burden while maintaining a sustainable retail estate.
Entain Expects Full Mitigation by the End of 2028
Despite the tax increase, Entain believes it can fully offset the additional £25 million cost by the end of 2028.
Its strategy includes three principal measures:
- Estate rationalisation: reviewing and optimising its network of retail premises.
- Operational efficiency: implementing group-wide optimisation initiatives.
- Market share gains: attracting customers from competitors that reduce their retail presence.
The company has not specified how many shops could be affected by its estate rationalisation programme.
The objective is to recover the financial impact through a combination of cost savings and commercial growth.
Entain Sees Opportunities to Strengthen Market Position
The group believes it has one of the strongest retail offerings in the UK betting market.
It therefore sees opportunities to attract customers if competing operators reduce their activities in response to higher taxation.
Entain considers its commercial infrastructure and established retail presence potential advantages during this period of adjustment.
However, these opportunities will depend on competitors’ decisions and wider market developments.
The strategy combines cost reductions with the possibility of increasing its market share.
Statements From CEO Stella David
Stella David, Chief Executive Officer of Entain, expressed concern about the consequences of the tax increase.
David argued that the gambling tax rises announced in November 2025 had already negatively affected the industry, employees, local communities and customers.
She also warned that the new changes could compound these effects and encourage more customers to move towards illegal gambling operators.
David emphasised that Entain’s priority will be to minimise the impact on its operations and protect jobs wherever possible.
The company also intends to maintain a sustainable retail presence on UK high streets.
Entain Maintains Financial Guidance
Despite the revised tax environment, Entain confirmed that its FY2026 guidance remains unchanged, following the outlook published on 15 October.
The group also reiterated its target of generating £500 million in annual adjusted cash flow in 2028.
Entain defines adjusted cash flow as excluding certain items, including:
- Working capital movements.
- Shareholder dividends.
- Acquisitions.
- Associated financing activities.
Maintaining these targets reflects management’s confidence in its ability to improve efficiency and adapt its business.
Further UK Gambling Tax Increases
The Machine Games Duty increase follows other tax changes announced in November 2025.
The principal changes include:
- Remote Gaming Duty: increased from 21% to 40%, effective April 2026.
- General Betting Duty: rising from 15% to 25% for certain remote betting activities from April 2027.
- Machine Games Duty: increasing from 20% to 25% for higher-stakes machines from April 2027.
Together, the reforms establish higher tax obligations across several gambling industry segments.
Entain argues that the combined changes place additional pressure on licensed operators.
Government Expects Additional Tax Revenue
The UK Government estimates that the changes involving Machine Games Duty will generate additional tax receipts of approximately:
- £135 million in 2027-28.
- £150 million in 2028-29.
The additional revenue forms part of a wider Budget strategy intended to support certain high-street businesses.
From April 2028, the Government also plans to change liability for the duty on supplier-owned gaming machines operated through profit-sharing arrangements.
These provisions form part of wider changes to the UK’s gambling tax framework.
Industry Impact and Next Steps
The Machine Games Duty increase represents a financial challenge for Entain and other gambling operators with substantial land-based operations.
The company must address an estimated £25 million in additional annual costs while implementing optimisation measures and exploring opportunities for commercial growth.
Despite these challenges, Entain has maintained its FY2026 financial guidance and 2028 cash flow target.
Entain expects to fully offset the impact of the new tax by the end of 2028 through estate rationalisation, operational efficiencies and potential market share gains.
The new tax rate, scheduled to take effect on 1 April 2027, will mark the beginning of this adjustment period.
Edited by: @fonta
