Sascha Blodau, Group Manager, MERKUR UK, is a voice the Government will find difficult not to listen to. Not only has the Merkur business invested significantly in its UK portfolio building a high street entertainment offering of over 230 venues and fast approaching 2,000 employees. It’s an international business that’s been committed to investing in Britain for decades and is one of the declining number of businesses that is dedicated to growth on UK high streets. The Chancellor’s Budget Statement this week may not have stopped the company’s commitment to the UK, but it has caused a moment to pause and “review our investment programme for 2027/28”.
“We are deeply disappointed by the Government’s decision to increase the standard rate of Machine Games Duty from 20 percent to 25 percent. This represents a 25 percent increase in the rate of a tax on gaming machine income at a time when businesses are already dealing with higher National Insurance costs, the statutory gambling levy and the general pressures of operating on the high street.
MERKUR remains committed to the UK market and we want to support the Government’s ambition to grow the economy. However, this decision means that we will have to review our investment programme for 2027/28 and consider the implications for our longer-term plans.
Over the past three years, we have opened three casinos in Aberdeen, Milton Keynes and Leeds. These are major investments which support hundreds of jobs and make a positive contribution to their local night-time economies. A 25 percent increase in the rate of duty on gaming machine income will have a significant impact on the viability of these venues and on our decisions about future investment.
The increase also puts jobs at risk across the wider industry. Many of these are first jobs for younger people beginning their working lives. We also employ a significant number of older people, some of whom could find it difficult to secure alternative employment if their roles were no longer sustainable.
At the dispatch box the Chancellor said these changes were designed not to affect pubs or the seaside. However, leaving some duty rates unchanged does not protect those businesses from the wider consequences.
While the increase applies to Category B machines, much of the cost of developing games is shared with Category C machines used in pubs and seaside venues.
Reducing the returns available from Category B products therefore puts pressure on the economics of developing and supplying games across both categories. We will be reviewing the implications with Blueprint Operations over the coming weeks to determine how best to manage the additional cost burden.
Seaside businesses also operate Category B machines and will therefore face a direct increase in duty. While we do not operate venues principally dependent on seaside trade, coastal operators, clubs and businesses across the wider bingo sector are customers of Blueprint Operations.
The additional duty will reduce the income available to affected businesses and may limit their ability to invest in their venues and their future. The effects will reach pubs and seaside businesses, even if that was not the Government’s intention.
Unlike increases in duty on alcohol or fuel, which are generally passed on to consumers through higher prices and can lead to a reduction in consumption, Machine Games Duty is paid by the operator. Increasing the duty does not in itself reduce demand or make the product any safer. If it leads to gaming becoming less readily available on the high street, it may instead change where customers choose to play.
Some customers will move online, away from venues where they can play under the supervision of trained staff. While much online gambling is licensed and regulated, customers may also encounter the unregulated black market, where the safer gambling measures and checks required of licensed operators may be absent.
We should also look carefully at the experience in Germany, where the illegal land-based gaming machine market has grown as the regulated sector has come under pressure. This demonstrates the risk that reducing the availability of licensed gaming can create opportunities for illegal operators.
Illegal venues may be linked to organised crime, offer none of the protections expected of regulated businesses and pay no tax. The Gambling Commission has already identified illegal land-based gambling as a concern, and we believe the problem could grow if the availability of regulated high street venues declines.
I continue to believe that the UK is a good place to do business, but every business needs to have certainty. We faced the same debate about gambling taxation last year and again this year, and it has now resulted in an increase. We also need a clear and consistent approach to gambling policy.
The recent outcome of the consultation on Gaming Machine Technical Standards will bring significant costs for operators, manufacturers and game suppliers. We are still awaiting the outcome of the bingo consultation, while the Government is also considering changes to the ‘aim to permit’ provisions.
For an international company deciding where to invest, this backdrop makes it difficult to plan with confidence, whether that investment is in refurbishing existing high street gaming centres or developing new casino projects. MERKUR and the wider industry need clarity. Without it, there is a risk that investment in venues, technology and innovation, including safer gambling innovation, will suffer.
We remain committed to safer gambling and have invested in new technology to help protect our customers. We need the Government to recognise that these improvements come at a cost, particularly when businesses are facing additional tax and regulatory pressures.”
Originally published on Coinslot on November 2, 2026. Republished with permission.