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UK BUDGET PULLS CATEGORY B MACHINES INTO 25% MACHINE GAMES DUTY RATE

Chancellor John Healey’s Budget moves Category B gaming machines from the 20% to the 25% Machine Games Duty rate from April 2027 and shifts liability for profit-share machines onto suppliers from 2028.

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Uk Budget Pulls Category B Machines Into 25% Machine Games Duty Rate

Gaming machines in British betting shops, casinos and bingo halls will pay Machine Games Duty (MGD) at 25% from 1 April 2027, after Chancellor John Healey used Wednesday’s Budget to redraw the thresholds that decide which machines fall into the higher rate.

Under the change, set out in the Treasury’s overview of tax legislation and rates, any machine with a maximum charge to play of more than £1 or a maximum prize of more than £100 will move from the standard 20% rate to the higher 25% rate. Until now the higher rate has applied only to machines costing more than £5 a play. The practical effect is to pull Category B machines, the mainstay of high street bookmakers and land-based casinos, into the top band. Lower-stake machines in pubs and seaside arcades stay on the standard rate. The measure will be legislated in Finance Bill 2026-27.

A second measure changes who pays. From 1 April 2028, suppliers will become liable for MGD on machines they own and run under profit-share deals with venues. Premises licence holders, permit holders and pub tenants will remain liable where they own a machine outright or rent it on fixed terms and control the takings. HMRC is consulting on how that switch will work until 20 January 2027, although the consultation does not seek views on rates or on stake and prize limits.

Relief that it was not 40%

The outcome is milder than many in the sector had feared. A Social Market Foundation report earlier this year had floated a 40% MGD rate, and the idea gained traction after 90 Labour MPs urged the Chancellor to double the duty on Category B machines. It also follows last year’s Budget, which almost doubled remote gaming duty from 21% to 40% from April 2026 and set the remote general betting duty on course to rise from 15% to 25% next year. Adult gaming centres also lose business rates relief under this year’s package.

Investors read the result as a relief. Rank Group shares rose about 8.8%, Entain gained about 4.7% and evoke added about 3.8% on Wednesday, according to market data cited by the trade press. Entain said it expects roughly £25m a year in additional UK and Ireland retail costs before mitigation and aims to cover the full amount by the end of 2028 through estate rationalisation, group-wide savings and potential market share gains. Its 2026 guidance and its 2028 adjusted cash flow target of £500m are unchanged.

“We’ve been clear about what’s at stake: jobs, investment and the future of betting shops on Britain’s high streets,” Entain chief executive Stella David said in a post on X.

Industry warns on shops and the black market

The Betting and Gaming Council called the rise a “deeply damaging decision”, pointing to modelling that suggests close to 9,000 jobs could be lost and around 1,000 betting shops and casinos could close or come under serious threat. Consultancy Regulus Partners estimated that the higher rate could close half of Britain’s betting shops over four years and cost horseracing £57m in levy and media rights income.

Retail estates are already shrinking. evoke closed around 270 shops in the period covered by its third-quarter trading update, and Flutter last week set out plans to cut up to 1,400 UK and Ireland jobs, citing the earlier tax rises.

Speaking to iGaming Business, Ismail Vali, president of Gaming Compliance International, said unlicensed operators were taking a growing share of online gross gaming revenue and warned that the UK was “knocking on the door of 10% illegal black market share”. He said he expected retail to consolidate, some operators to fail and more play to migrate online.

Dan Waugh, a partner at Regulus, told the same outlet the industry needed to work out “how it breaks this cycle of tax increases and regulatory tightening”.

What happens next

The rate change will be carried in Finance Bill 2026-27 and takes effect in April 2027, giving operators around five months to adjust their estates. The supplier liability change follows a year later, once the HMRC consultation has closed. With two consecutive Budgets now raising gambling duties, operators will be watching whether the Treasury treats this round as the end of the tightening cycle or the start of another.

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STAR ENTERTAINMENT ORDERED TO PAY A$260M PENALTY IN AUSTRAC AML CASE

The Federal Court of Australia has ordered The Star Entertainment Group to pay a A$260m penalty over serious AML/CTF breaches, below the A$400m AUSTRAC sought, in four instalments over 19 months.

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Star Entertainment Ordered To Pay A$260M Penalty In Austrac Aml Case

The Star Entertainment Group has been ordered by the Federal Court of Australia to pay a A$260m civil penalty for serious breaches of the country’s anti-money laundering and counter-terrorism financing laws, ending a case brought by the Australian Transaction Reports and Analysis Centre (AUSTRAC) in 2022.

Justice Cameron Moore handed down the judgment on Wednesday 28 October. The penalty comprises A$195m relating to Star’s Sydney casino and A$65m relating to its Queensland operations. Star has 19 months to pay the sum in four equal instalments, with the first due within 28 days of judgment, according to the Australian Associated Press.

Court splits the difference

The figure lands between the positions put to the court. AUSTRAC had sought A$400m, while Star argued that anything above A$100m, particularly if payable within 12 months, could push it into liquidation. Justice Moore found the lower figure too light and the higher one excessive.

The judge described the contraventions as serious and “not mere oversights from time to time”, calling the conduct egregious and the number of contraventions immeasurable. “In effect, Star put profit ahead of compliance and did so on a large scale,” he said, according to reports of the judgment.

He also took account of penalties already imposed. Star has received A$200m in penalties for conduct that significantly overlaps with the AUSTRAC case, the judge noted, and he said the fine would have been higher without the remediation now under way at the group.

Junkets and high-risk customers

AUSTRAC’s case centred on Star’s failure to maintain a compliant AML/CTF programme and to carry out appropriate ongoing customer due diligence. The regulator alleged that Star failed to properly address money laundering risks arising from its dealings with the Asian junket operator Suncity and its funder, and continued to deal with them after becoming aware of reports linking them to criminal activity. The court heard that a customer with known criminal links moved hundreds of millions of dollars through the casino.

AUSTRAC chief executive Brendan Thomas said the court had found Star allowed high-risk customers to gamble without properly establishing the source of their funds, and that junkets were permitted to engage in highly suspicious activity without controls while retaining access to private gaming rooms. Because of Star’s admitted monitoring failures, the regulator said it cannot know how much money high-risk customers moved through the casinos.

“AUSTRAC will not tolerate companies putting profit over their obligations to the Australian community,” Thomas said in a statement.

Pressure on a fragile balance sheet

The penalty falls on a company that has spent much of the past five years fighting for survival. Star reported a A$307m loss for the 2026 financial year, narrower than the A$428m loss a year earlier, and its auditor EY warned in August of material uncertainties over its ability to continue as a going concern. A A$300m rescue package backed by US operator Bally’s Corporation and the Mathieson family saved the business from administration in April 2025.

Star requested a trading halt on the ASX ahead of the judgment, with shares last trading at A$0.13, against A$3.70 when casino regulators began investigating the group in late 2021. The halt runs until the earlier of an announcement or the start of trading on Friday 30 October. At the time of writing Star had not set out how it intends to fund the instalments. The judge observed that the company would likely need to raise money to meet the penalty.

The ruling came a day after Star’s annual general meeting, where chair Soo Kim, who also chairs Bally’s, told shareholders that “the fire is out” and that rebuilding could begin. On the same day Star reported positive quarterly earnings and operating cash flow for the first time in two years.

The penalty is the third major AUSTRAC casino outcome in recent years, following the A$450m penalty imposed on Crown Melbourne and Crown Perth in 2023 and SkyCity Adelaide’s A$67m penalty in 2024. Justice Moore said comparisons with the Crown case were of limited use given significant differences between the matters. Star’s next step will be its response to the ASX once the halt lifts, with investors watching for any capital raising needed to meet the first payment next month.

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US IGAMING GROWTH SLOWS TO RECORD-LOW 12% IN Q3, CITIZENS DATA SHOWS

US online casino revenue grew 12% year on year in the third quarter of 2026, the slowest rate on record, according to Citizens equity research, while sports betting handle held steady.

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Us Igaming Growth Slows To Record-Low 12% In Q3, Citizens Data Shows

US online casino revenue grew 12% year on year in the third quarter of 2026, the slowest rate on record, according to data from Citizens equity research, while sports betting held steady despite one fewer week of NFL action in the period.

The figures, published in a Citizens research note this week and reported by ReadWrite, Gambling News and the trade press, show a steady deceleration through the year. iGaming revenue growth stood at 19% in the first quarter and 16% in the second before easing to 12% in the three months to 30 September. Analysts described the slowdown as broadly in line with their expectations. The note does not appear to have been made public, and the reported data cover growth rates and market shares rather than a dollar total for the quarter.

Within the quarter, growth picked up slightly at the end. Citizens put September iGaming growth at 12%, compared with 11% in August.

Launch boost fades

Part of the slowdown reflects the fading effect of recent launches. Citizens pointed to the arrival of bet365 and Hard Rock in Michigan and West Virginia as a factor whose impact was now wearing off.

The leading operators kept their positions, but the top three all lost share over the year. FanDuel remained the largest iGaming operator with 25.1% of revenue, down from 26.6% a year earlier. DraftKings held 22.2%, down from 24.3% year on year but up from 20.9% in the second quarter, its first sequential gain in two years. Citizens linked the improvement to changes DraftKings made to its business model in the spring. BetMGM’s share fell to 18.6% from 20.7%, a sixth straight quarterly decline.

Fanatics was the standout, lifting its share to 5.2% from 3.9% a year earlier, though slightly below the 5.4% it held in the second quarter.

State data tells a similar story

September figures from state regulators broadly match the picture of slower but still positive growth. In New Jersey, the Division of Gaming Enforcement reported internet gaming win of $274.8m, up 13.0% year on year, as New Jersey’s online casino market continued to grow at a double-digit pace. Pennsylvania’s growth was more modest: the Pennsylvania Gaming Control Board reported that Pennsylvania iGaming revenue rose 6.82% to $249.3m, with slots doing most of the work.

Michigan, the largest of the three by monthly online casino receipts, reported iGaming gross receipts of $300.2m for September and adjusted gross receipts of about $288.2m, according to the Michigan Gaming Control Board’s monthly release.

Sports betting steady

Sports betting proved more resilient. Citizens data showed third-quarter handle up about 7% year on year, even with one fewer week of NFL play in the period, according to reports of the note. Same-store handle rose 1% in September, the strongest monthly growth of 2026 outside June and July, when the World Cup lifted volumes.

DraftKings led on handle with a 37.6% share, up from 37.3%, ahead of FanDuel at 32.8%, up from 31.4%. Fanatics’ handle share fell to 9.9% from 11.2%, although its share of sports betting revenue rose to 8.8% from 7.3%. Among hold rates, BetMGM improved to 10.2% from 9.6%, Caesars fell to 6.9% from 7.6%, and bet365 held at 9.4%.

State-level sports betting results were mixed in September as early NFL results swung hold. New Jersey’s sports wagering revenue fell 14.3% to $77.0m, while Pennsylvania’s revenue jumped 50.45% to $44.7m on handle that dropped 6.09% to $798.7m.

Prediction markets

Citizens analyst Jordan Bender has argued that prediction markets do not pose a significant threat to licensed sportsbooks. In his view, the heavy marketing spend of prediction platforms may be bringing new customers into sports betting rather than drawing existing bettors away from regulated operators.

Analysts expect sportsbook handle to rise in the fourth quarter as the NFL season progresses. For iGaming, the question is whether growth stabilises around current levels in the existing states, with legislative expansion to new markets still moving slowly.

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SKYCITY OPENS WHOLE-OF-BUSINESS SALE PROCESS AHEAD OF NZ ONLINE LAUNCH

SkyCity Entertainment Group has appointed UBS and Chapman Tripp to run a structured process seeking proposals for the whole business, as it prepares applications for two New Zealand online casino licences.

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Skycity Opens Whole-Of-Business Sale Process Ahead Of Nz Online Launch

SkyCity Entertainment Group has opened a structured process to seek proposals for the whole of its business, appointing UBS and law firm Chapman Tripp to run it, months after rejecting two takeover approaches it said undervalued the company. The move was set out by chair Julian Cook at the NZX and ASX-listed operator’s annual shareholders’ meeting in Auckland on 21 October, and comes as SkyCity prepares applications for two licences in New Zealand’s new regulated online casino market.

What is under review

The review covers the entire group rather than a single asset. In his address, filed with NZX, Cook said the board had received no improved proposals from the earlier bidders and no whole-of-business proposal from anyone new, but remained aware of continued interest in the company.

“In the interests of shareholders, the Board has decided to seek proposals through a structured process,” Cook said. The process will involve engaging with interested parties and giving them access to some due diligence information so they can develop proposals. UBS is acting as investment banking adviser and Chapman Tripp as legal adviser.

The board has set up a Structured Review sub-committee to oversee the work over the coming months. Cook said the process would “take some time to progress” and that there was no certainty it would lead to any transaction or offer. No timetable or deadline for proposals has been disclosed. He added that the board remained confident in its current strategy but would consider carefully any proposal that delivered greater value for shareholders.

Rejected bids and Adelaide sale

The review follows SkyCity’s disclosure on 25 August that it had received two unsolicited, conditional, non-binding indicative proposals in May. One came from a special situations fund managed by Oaktree Capital Management at NZ$0.70 cash per share, and the other from an unnamed party at an implied NZ$0.75 per share. The board unanimously concluded that both undervalued the company and carried problematic conditions, including at least eight weeks of due diligence and a request not to proceed with asset sales.

The group-level process runs alongside a separate formal sale process for SkyCity Adelaide. Chief executive Jason Walbridge told shareholders that interested parties had approached SkyCity after it announced a strategic review of the South Australian business in August. The company has also reached a non-binding heads of agreement with South Australia’s Minister of Consumer and Business Affairs to resolve outstanding regulatory matters arising from the independent review of the casino, including a A$21m fine.

SkyCity’s asset monetisation programme is expected to deliver close to NZ$300m in gross proceeds by the end of 2026. The sale of Auckland commercial buildings settled at NZ$74.5m in September, and the conditional NZ$221m sale of The Grand Hotel is expected to settle in December.

Online casino licences

The review coincides with SkyCity’s push into New Zealand’s regulated online market under the Online Casino Gambling Act 2026. The company was among the winners of the Department of Internal Affairs’ auction for the right to apply for online casino licences, securing two of the 15 rights through two separate entities at NZ$15m each.

Walbridge said the auction settled within the price scenarios SkyCity had modelled, and that cutting back from the maximum three licences to two was a deliberate capital allocation decision to stay within its risk-adjusted return on capital targets. The company is now preparing its licence applications. Cook described the regulated market as worth more than NZ$1bn a year.

“We believe we can compete strongly in this important market,” Walbridge said, pointing to SkyCity’s 30 years as a land-based operator and its ability to advertise online for the first time. He said SkyCity expected the market to be competitive and would watch advertising levels closely when it goes live in the second half of FY27.

Trading and outlook

SkyCity reported underlying FY26 revenue broadly flat at NZ$822.7m, with gaming revenue down 5.9% after the introduction of carded play at its New Zealand casinos and weaker premium play. Underlying EBITDA fell 22.3% to NZ$181.6m. The company said first-quarter FY27 trading was consistent with the fourth quarter of FY26 and that consumer conditions in New Zealand and Australia remained subdued.

It expects capital expenditure around the midpoint of its NZ$80m to NZ$100m range, plus NZ$30m for the online licences, and is not providing formal guidance because the timing of online market entry has yet to be set. The board aims to resume dividends in FY28.

Any bidder engaging through the structured process would be pricing a business that is part way through a land-based turnaround, an Adelaide exit and an online launch. SkyCity has said it will update shareholders as appropriate.

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