The share prices of the biggest gambling companies on the London Stock Exchange (LSE) have jumped significantly, despite a tax hike being announced in the Autumn Budget.
Entain, evoke and Rank Group have all seen their stocks suffer in the last 12 months as pressure increases on the sector in the UK.
That pressure was ramped up today as Chancellor of the Exchequer, John Healey, confirmed that the Labour government will increase Machine Games Duty (MGD) on Category B machines from 20-25%, effective 1 April 2027.
It comes as the government under Prime Minister Andy Burnham continues on its quest of using the gambling industry as somewhat of a battering ram to raise funding for HM Treasury.
Some in the industry who feared the worst, however, may be relieved that the tax hasn’t increased to 40% like some were lobbying for.
It seems investors were braced for that scenario, as the announcement of the measure led to the stocks of Entain, evoke and Rank Group increasing.
What has the announcement resulted in on the LSE?
Entain is up by 4.86% today to 474.7p at the time of writing (2:30pm GMT). Its share price flew between 12:50pm and 1:00pm from 456.4p to 484.1p as investors reacted to the news of a 5% rise.
Group Chief Executive Officer, Stella David had previously warned that an MGD rise “threatens the viability of many” of its Ladbrokes and Coral shops – though shareholders seem glad of avoiding a doubling of MGD.
William Hill owner, evoke, meanwhile, is up by over 4% to 44.75p. The company is in the process of being acquired by Bally’s Intralot in a 52p-per-share deal but the William Hill estate remains one of the stalwarts of UK retail gambling.
It has been downsized due to the increases in Remote Gaming Duty (RGD) and General Betting Duty (GBD), and this latest tax hike will put the estate under further pressure – but perhaps slightly less pressure than was initially expected.
Rank Group’s stock flies on Budget announcement
Of note, Rank Group shares have soared by over 10% so far today to 86.9p. Rank Group is heavily reliant on gaming machines, with net gaming revenue (NGR) from the product contributing £60.1m of the entire £143m NGR from Mecca venues in 2025/26.
For Rank Group’s Grosvenor Casinos, gaming machines generated nearly 30% (£113.2m) of full NGR (£397.3m).
A doubling of MGD was already being touted as disastrous by CEO Richard Harris, who warned that the company would have to close around a third of its estate. A 5% increase is unlikely to have this monumental impact.
So, while investors seem bullish on gambling stocks currently, let us not forget that a tax rise is a tax rise, and will never be a positive for any business affected.
MGD increasing from 20% to 25% is not a case of gambling getting off the hook – rather another warning sign that this government will look to use the industry as a cash cow.
Relief for businesses on public markets does not always equate to relief for its bottom lines, retail locations and, most importantly, employees.
