In the open letter, operators warned that any potential increase to Machine Games Duty (MGD) would threaten thousands of jobs, many of which in areas of high unemployment and in the process, decimate the infrastructure of high streets and the cultural fabric of coastal communities.
Representing a diverse network of family businesses, the coalition of independents has made a direct and urgent appeal to the Treasury to keep MGD at its current rate of 20 percent.
The closely argued letter reflects an industry that’s woven into the working-class heritage of the United Kingdom, citing iconic seaside destinations such as Blackpool, Skegness, Margate, Great Yarmouth, Porthcawl, Rhyl, and Portrush.
Many of the signatories are third or fourth generation operators with their businesses having survived economic recessions, market shifts including the decline in popularity of the traditional domestic holiday, and the lengthy closures caused by the government response to the COVID-19 pandemic.
“These are not just businesses on a corporate balance sheet,” the letter states. “They represent our families’ life’s work, and the memories of millions of people who have walked through our doors.”
Unlike other parts of the broader hospitality and leisure economy, venues face a unique legislative trap. Because stake and prize levels are capped by law, operators cannot simply raise prices to offset their soaring overheads.
It points out the industry has already had to absorb massive spikes in energy bills, commercial rents, statutory wage inflation, and increased employer National Insurance contributions.
Furthermore, operators are burdened by an inability to offset MGD against Value Added Tax (VAT), effectively causing them to be taxed twice on much of their earnings.
The letter revealed that across the sector, non-recoverable VAT reached £56 million in 2025. Because input VAT cannot be recovered, capital investment for refurbishments and building maintenance is severely penalised, making it increasingly difficult to keep regulated premises viable.
The warning directly challenges the Government’s stated agenda of delivering economic growth to ‘every postcode’.
Because venues are heavily concentrated in seasonal, rural, and coastal economies, areas where stable, year-round employment is notoriously difficult to find, a regressive tax hike could trigger immediate contraction in many postcodes.
The letter confirms that the income generated by gaming machines during peak seasons is what allows independent operators to maintain full-time staff through the winter and anchor local high streets that have already lost vital infrastructure including bank branches, pubs, and post offices.
The economic shockwaves of potential closures would also reverberate far beyond the venues themselves. The letter highlights a vulnerable domestic supply chain, particularly specialist British manufacturing firms which rely on the order books of local arcades to sustain their own skilled workforces.
Local supply chains ranging from cleaning and security firms to food and beverage suppliers, taxi firms, and professional services, would similarly face a sharp drop in demand if venues close.
The letter argues that squeezing safe, regulated, and heavily supervised physical venues out of the market will not stop people from gambling; instead, it will drive vulnerable players toward dangerous, unlicensed alternatives.
To illustrate the reality of the threat, the operators pointed to enforcement actions taken just last summer. Joint raids supported by the Gambling Commission uncovered sophisticated, illegal gambling premises operating slot machines and betting terminals entirely outside the law.
Unlike legitimate high street gaming centres and bingo halls, these illicit operations feature no trained staff, enforce no age verification checks, offer zero self-exclusion tools for problem gamblers, and contribute absolutely nothing to the statutory levy intended to fund addiction treatment and prevention.
The independent leisure sector is demanding a fair, sustainable tax policy that acknowledges their civic value, preserves ordinary working-class pastimes, and allows them to safely pass their life’s work down to their children.
Joseph Cullis:
“The letter which has been signed by more than 100 independent, family-run businesses from across the amusement, bingo and leisure industries, alongside the manufacturers and suppliers that support them, confirms the impact a rise in MGD will have on these invaluable community-based assets.
“They provide thousands of jobs, support local economies and are at the heart of high streets and seaside communities across the country.
“An increase in Machine Games Duty would put jobs, livelihoods and the future of longstanding family businesses at serious risk. For some, it could be the final straw.
“We recognise the difficult decisions facing the Treasury, but we urge the Chancellor to consider the real-world consequences of such an increase. Once these businesses close, the jobs, investment and contribution they make to their communities will be extremely difficult to replace.”
Originally published on Coinslot on October 26, 2026. Republished with permission.