John Bollom, of Bacta, said that the Treasury was “playing a dangerous game” by considering the move.
He said: “19,000 jobs in seaside towns across the UK are dependent on arcades, and if these proposals came into force it would be devastating for the industry and devastating for coastal communities.
“People in coastal towns have placed their trust in newly-elected Labour MPs. It would be appalling if that trust was repaid almost immediately in job losses and a total disregard for the fabric of the British seaside holiday.
“We have one simple message for Rachel Reeves: don’t destroy the Great British seaside.”
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.”
The tax hike would also apply to fruit and quiz machines in pubs or clubs, as well as bingo hall machines.
Miles Baron, chief executive of The Bingo Association, said a quarter of bingo halls had already shut down since 2020, due to a “perfect storm” of the Covid-19 pandemic and a spike in energy bills.
He added: “If there was any substance to [doubling MGD], it wouldn’t harm the bingo industry – it would kill it.
“Annual profits for bingo clubs was around about £42m in 2023. That’s after £46m of MGD. If you double that to £92m, that increases more than the total profit that bingo clubs in Great Britain produce.
“Any increase at all will undoubtedly cause casualties.”
A HM Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”