Entain outlines £25 million machine duty exposure
Entain expects the UK’s latest machine gambling tax increase to add approximately £25 million in annual costs to its UK and Ireland retail division before mitigation. The company disclosed the estimate on October 28, while retaining its 2026 guidance and its adjusted cash flow target for 2028.
The estimate relates to the increase in duty on gross gaming revenue generated by Type 2 gaming machines in Entain’s retail shops. The rate will rise from 20% to 25% on April 1, 2027. Entain based its calculation on consensus expectations for the division’s 2027 net gaming revenue.
The group expects to offset the additional cost fully by the end of 2028. Its stated approach combines changes to the retail estate, group-wide operational efficiencies, and potential market share gains as competitors reassess their presence on UK high streets.
“This is another disappointing decision by the Government,” CEO Stella David said. She argued that the latest increase would compound pressures from earlier tax changes and said the company would seek to limit the effects on employees, customers, and communities. Those assessments represent Entain’s position on the policy.
Tax changes extend beyond the headline rate
The company update follows the machine games duty increase. The government’s Budget specifies that the 25% rate applies to machine games with stakes above £1 or prizes above £100. Existing rates for lower-stake machines will remain in place.
The Budget also provides for a separate change from April 1, 2028, transferring duty liability to suppliers for supplier-owned machines operated under profit-sharing arrangements. The government has opened a consultation on implementation, including how different commercial arrangements should be treated. That consultation closes on January 20, 2027.
Entain maintained its expectation of generating £500 million in annual adjusted cash flow in 2028. Its definition excludes working capital, equity dividends, acquisitions, and associated financing. The company also retained the full-year guidance it had issued on October 15.
The government links the additional machine-duty revenue to support for retail, hospitality, and leisure business rates. Its Budget forecasts combine the rate increase and the later supplier-liability reform; those industry-wide revenue projections are separate from Entain’s estimate of its own annual exposure.
