Bacta Challenges UK Gambling Tax Rise Over Seaside Arcade Concerns
United Kingdom.- 30 October 2026 | www.zonadeazar.com Bacta, the British trade association representing the amusement and gaming machine industry, has criticised the increase in Machine Games Duty (MGD) from 20% to 25%, announced in the UK Government’s Autumn Budget 2026.
Joseph Cullis, President of Bacta, warned that the measures do not adequately protect traditional seaside amusement arcades, despite statements made by Chancellor John Healey.
The association argues that many businesses depend financially on adjoining Adult Gaming Centres (AGCs), which will be affected by the higher tax rate.
Machine Games Duty to Rise to 25% in April 2027
The UK Government confirmed on 28 October that Machine Games Duty will increase by five percentage points for certain gaming machines.
The new rate will take effect on 1 April 2027 and apply to machines meeting either of the following conditions:
- Maximum stake exceeding £1 per game.
- Maximum prize exceeding £100.
The increase will primarily affect higher-stakes machines located in adult gaming centres, betting shops, casinos and certain bingo premises.
Lower-stakes and lower-prize machines will retain their existing tax treatment.
Bacta Questions Protection for Seaside Arcades
During the Budget announcement, Healey stated that the Government intended to protect pubs and seaside amusement arcades.
However, Bacta believes the protection is insufficient.
The association explains that many family entertainment venues in coastal destinations rely on income generated by adult gaming centres operating within or alongside their premises.
Consequently, even where certain amusement machines are excluded from the increase, businesses operating them may still face substantial additional tax obligations.
Category D Machines Remain Excluded
The reform maintains the existing tax treatment for Category D gaming machines, which are commonly found in family amusement arcades.
These machines have relatively low stake and prize limits and will not be subject to the new 25% rate.
However, businesses that also operate Category B machines will face the relevant increase.
Bacta argues that this distinction does not adequately reflect the commercial structure of mixed entertainment businesses, particularly those operating in seaside resorts.
Statements From President Joseph Cullis
Joseph Cullis, President of Bacta, directly challenged the Chancellor’s statements.
“The Chancellor claims to be protecting Britain’s seaside arcades, but the reality is very different,” Cullis said.
He explained that while some lower-stakes machines have been spared, other machines supporting the financial viability of many seaside businesses will still be affected.
Cullis also warned that adult gaming centres on high streets across the country would face significant consequences.
Concerns Over Jobs and Local Economies
Bacta considers seaside amusement arcades an important part of Britain’s coastal communities.
These businesses contribute to employment, tourism and local economic activity across England, Scotland, Wales and Northern Ireland.
According to Cullis, the tax increase could particularly affect family-run businesses that have operated for several generations.
The association warns that reduced profitability may lead to lower investment and changes to expansion plans.
It also questions whether additional tax receipts will outweigh potential consequences for employment and local businesses.
AGCs Excluded From Business Rates Relief
Another concern involves the exclusion of adult gaming centres from certain business rates relief measures.
The Government has announced changes designed to support retail and hospitality businesses operating on British high streets.
However, AGCs have been excluded from these benefits.
Consequently, their operators will face the Machine Games Duty increase without receiving the same business rates support available to other commercial activities.
Bacta believes this combination will place additional financial pressure on the industry.
Family Businesses May Reduce Investment
Cullis referred to his own family business to illustrate the industry’s concerns.
The Bacta president explained that his great-grandfather established the business in 1962, giving it more than six decades of operating history.
According to Cullis, the new tax arrangements will force operators to reconsider future investment and make difficult decisions about their businesses.
He also warned that larger companies may scale back their commercial plans.
These statements reflect industry concerns, although no official figures are yet available on business closures attributable to the new tax increase.
Government Aims to Support High Streets
The Machine Games Duty increase forms part of a wider Budget strategy intended to fund support measures for businesses on Britain’s high streets.
The Government argues that higher-stakes gaming machines should face a higher tax rate while maintaining the existing treatment of lower-stakes products.
Official estimates suggest the reform will generate approximately £135 million in additional revenue during the 2027-2028 financial year.
Government documentation estimates that around 5,100 operators and 12,400 premises will be affected.
These projections concern the overall impact of the tax measure rather than seaside amusement arcades alone.
Industry Impact and Next Steps
Bacta’s response reflects concerns among land-based operators regarding increasing taxation on gaming machines.
Although the Government has maintained the tax treatment of lower-stakes machines, businesses combining family entertainment with adult gaming centres could face higher operating costs.
The exclusion of AGCs from certain business rates relief measures represents an additional concern.
With Machine Games Duty scheduled to rise to 25% on 1 April 2027, Bacta warns that the reforms could reduce investment, affect employment and undermine the viability of traditional businesses in Britain’s coastal communities.
The association will continue assessing the Budget’s consequences and representing the interests of gaming and amusement operators.
Edited by: @fonta
