The gaming group said the Autumn Budget increase in Machine Games Duty from 20% to 25% will add about £9m a year to costs before mitigation, but it remains confident on current-year like-for-like operating profit.

What was announced

The Rank Group (LSE:RNK) Plc on 29 October 2026 set out the expected impact on its Business of the UK Autumn Budget 2026, which was delivered on 28 October 2026.

The key measure for Rank is an increase in Machine Games Duty (MGD), the tax charged on the net takings from gaming machines, from 20% to 25%. The new rate will take effect from 1 April 2027.

Rank said the change will increase its duty costs by approximately £9m on an annualised basis, before any mitigating actions are taken. For the current financial year, which ends on 30 June 2027, the company expects duty costs to rise by about £2m, reflecting the shorter period for which the higher rate will apply.

The numbers

The move from 20% to 25% is a five percentage point increase in the headline rate. As a calculation, that represents a 25% rise in the duty rate relative to its current level, so for every £100 of qualifying machine takings, the duty charge rises from £20 to £25.

The £2m expected in the current year compares with the roughly £9m annualised figure. Since the new rate starts on 1 April 2027, it will apply to approximately the final three months of Rank's financial year; a quarter of £9m is about £2.25m, which is broadly consistent with the company's estimate. This is a calculation based on the stated figures, not a breakdown provided by Rank.

Despite the additional cost, Rank said it remains confident of delivering group like-for-like operating profit in line with expectations for the current financial year. The announcement does not give a figure for those expectations, and it does not state whether the expectations referred to are the company's own or market consensus.

The statement also does not quantify the effect on full-year profit in percentage terms, nor does it identify which specific mitigating actions the group may take, or how much of the £9m those actions might offset.

Background

Rank is a UK gaming operator, and gaming machines in its venues are subject to MGD, so the rate change feeds directly into the group's cost base. Rank's statement focuses only on the MGD change and does not comment on other Budget measures that may affect the business, such as employment costs or business rates. The company said a fuller picture of the total Budget impact will follow.

No comment from the chief executive or chair was included in the announcement, which was released as a short regulatory statement.

What to watch next

Rank said it will provide a fuller update on the total impact of the Budget, together with details of mitigating actions, alongside its interim results for the six months ending 31 December 2026. Those results are scheduled for 28 January 2027.

That update is likely to be the first opportunity for investors to see how Rank plans to respond to the higher duty rate, whether through pricing, changes to its machine estate, cost savings elsewhere or other measures, and how much of the £9m annualised cost it expects to recover. The interim results will also show how trading has developed in the first half against the like-for-like operating profit expectations the company has reaffirmed.

Investors will also look for any update on the effect of the duty change on the group's outlook for the 2028 financial year, the first full year in which the 25% rate will apply.