Rachel Reeves set to launch 'devastating' £2.9bn tax raid in huge blow to UK seaside towns

is reportedly planning to launch a "devastating" £2.9 billion tax raid that could wipe out the seaside amusement park industry.

The Chancellor is considering doubling the rate of machine games duty as part of a potential £2.9bn tax raid on the gambling industry, reports .

However, the proposal is likely to come as a huge blow to the amusement arcades by putting several jobs at risk. Apart from this, the future of popular seaside games like 2p and bingo machines may also be in limbo, experts and business owners have warned.

Industry experts believe that the move could "destroy the British seaside" and have urged Ms Reeves to reconsider the "devastating raid."

Machine Games Duty (MGD) is a tax on machines that offer cash prizes exceeding the amount initially staked. The tax rate varies based on the highest possible stake and prize of each game, currently set at 5%, 20%, or 25%.

Owners of these machines are taxed on their net earnings and must submit quarterly returns to HM Revenue and Customs. For the tax year 2023-24, MGD generated £553.4 million in revenue.

Recently, the Institute for Public Policy Research (IPPR) suggested doubling the lower two tax rates to 10 percent and 40 percent.

If implemented, this increase would significantly impact profits from popular family games like 2p coin pushers, miniature horse racing, and cash prize claw machines.

William Bollom, 47, who runs the Olympia amusement arcade in Weston-super-Mare, said it would be a "big nail in the coffin of the British seaside".

He told The Telegraph: "It would devastate small, family seaside businesses. Any seaside business is feast and famine. August is the most magnificent month of the year for us, but it's a long time until Easter.

"We have been hit by some pretty big charges over the years. If you own a shoe shop and the shoes you're selling become more expensive, you charge more. [For us] a 2p is still a 2p. Our electric bill has virtually trebled over the last few months. We haven't had an increase in stakes and prizes in 14 years. You just can't pass on the costs.

"We are as important to the British seaside as fish and chips and donkey rides. These are real people's lives and jobs. [The Chancellor] needs to make sure we don't get swept along by legislation that's not aimed at us."

Seaside arcades, according to the latest data from the British Amusement Catering Trade Association (Bacta), add £451 million to the UK economy. This figure reflects the revenue generated by traditional arcade games and attractions found at coastal resorts, which play a significant role in supporting local economies, tourism, and employment.

These arcades are a staple in British seaside towns, drawing both tourists and locals, and their contributions help sustain the vibrancy and appeal of these areas.

A spokesman for the British Association of Leisure Parks, Piers and Attractions said: "Any increase in machine games duty would have a significant impact on our members' ability to operate, undermine domestic tourism, and prove devastating for coastal communities and anyone who cares about Britain's seaside heritage."

A HM Treasury spokesman told the publication: "We do not comment on speculation around tax changes outside of fiscal events."