UK Chancellor John Healey is weighing an increase in Machine Games Duty applied to Category B slot machines ahead of the October 28 budget, a move intended to generate additional revenue during a period of constrained public finances. Reports emerging in September 2026 indicate the proposal builds on earlier suggestions from the Social Market Foundation think tank, which outlined a plan to double the current rate from 20% to 40%.

The consideration comes as the government seeks new income streams, and Category B machines represent one area under review for potential adjustment. Treasury officials have confirmed that any final decisions on tax rates will be set out during scheduled fiscal events rather than through separate announcements.

Category B machines operate primarily in betting shops and arcades across the UK, and the existing 20% Machine Games Duty has remained in place for several years. The Social Market Foundation's earlier analysis examined how raising this rate could contribute to public revenue targets, and that framework now appears to inform the current deliberations. Observers note that the timing aligns with preparations for the October budget, where multiple fiscal measures will receive simultaneous consideration.

Data from industry monitoring shows Category B machines account for a measurable portion of gaming activity in licensed premises, which means any rate change would affect a defined segment of the market. The proposal does not extend to other machine categories at this stage, keeping the focus narrow.

The Betting and Gaming Council has stated its opposition to any increase, citing concerns that higher duty rates could accelerate the closure of betting shops, reduce employment opportunities within the sector, and potentially shift activity toward unlicensed operators. Council representatives have highlighted existing trends in shop numbers and workforce levels as evidence that further cost pressures may compound ongoing challenges.

Industry figures indicate that betting shops have already experienced a decline in physical locations over recent years, and the Council argues that an additional tax burden would intensify that trajectory. The organisation also points to the risk of growth in illegal gambling markets if regulated operators face conditions that limit their ability to maintain current service levels.

A Treasury spokesperson has emphasised that no decisions have been finalised and that the Chancellor will present the complete set of measures at the appropriate fiscal event. This approach keeps the process aligned with standard budget procedures, where multiple revenue and spending items receive collective review. The spokesperson noted that all options remain under consideration as part of the broader effort to address public finance requirements.

Policy discussions of this nature typically involve input from multiple departments, and the current review follows established channels for tax policy evaluation. The October 28 date provides a defined timeline for announcements, allowing affected stakeholders time to prepare responses once details become public.

Public finances remain under pressure from various commitments, which has prompted examination of several revenue-raising measures. Machine Games Duty on Category B machines constitutes one targeted area where adjustments could produce measurable returns without requiring changes across the entire gaming sector. The September 2026 reports place this consideration within a sequence of fiscal reviews that will culminate in the budget statement.

Those monitoring the situation observe that earlier proposals from the Social Market Foundation provided a starting point for calculations, and the Chancellor’s team is now assessing how such a change might integrate with other budget items. The process continues to draw on data from both regulatory bodies and industry associations to inform the evaluation.

Further details will emerge as the October 28 budget date approaches, with the Treasury expected to incorporate any Machine Games Duty adjustment into the wider fiscal package. Stakeholders including the Betting and Gaming Council will continue to present their assessments during the intervening period. The government has indicated that final outcomes depend on the overall balance of revenue needs and economic considerations at the time of the announcement.

Observers expect the budget statement to clarify whether the rate change moves forward, remains at current levels, or receives modification based on additional analysis. Until that point, the focus stays on the single proposal under review and its potential effects on the defined machine category.

The review of Machine Games Duty for Category B machines forms part of ongoing preparations for the October budget, driven by the need to address public finance requirements. The Social Market Foundation’s earlier proposal to double the rate supplies one reference point, while the Betting and Gaming Council has outlined its concerns regarding closures, employment, and illegal markets. Treasury statements confirm that decisions will be communicated through the scheduled fiscal event, maintaining the standard process for tax policy announcements in September 2026 and beyond.