High street slot farms may avoid new tax via bingo licences
Hundreds of adult gaming centres in England may retain discounted business rates by operating under bingo licences, despite a budget change targeting…
Hundreds of adult gaming centres in England could keep discounted business rates through bingo licences, leaving a potential gap in the government’s budget changes for high street slot farms. The budget raised duty on slot-machine takings from 20% to 25% and removed adult gaming centres’ eligibility for a business-rates discount aimed at leisure and hospitality businesses.
The change was presented as part of a wider effort to raise gambling taxes and alter support for certain businesses. But venues that appear to focus on slot machines may still qualify for bingo treatment, making the licensing rules and their enforcement central to whether the discount ends in practice.
How could high street slot farms retain the discount?
Some adult gaming centres have bingo licences even though their premises appear to be geared mainly towards slot-machine play. Gambling Commission records indicate that more than 200 arcades are licensed as bingo venues, although duplicated data makes the exact number difficult to establish.
When investigators visited four Merkur-owned venues and one owned by Admiral, each advertised bingo in its windows. Inside, however, slot machines appeared to dominate. Bingo was available on tablets in a small corner of the rooms.
In one venue, a staff member said nobody used the bingo tablets. Covert footage also showed the devices appeared not to be working. The rest of the premises was devoted to slot machines offering a £2 spin every 2.5 seconds for a £500 jackpot.
Those machines are classified as category B3. Several studies associate them with higher levels of gambling-related harm than most other gambling products, according to the account of the investigation.
What does the change mean for operators and high streets?
The practical effect could reach beyond tax bills. If venues can retain a discount by holding a bingo licence, the budget’s business-rates change may not apply evenly to centres that look and operate primarily as slot-machine arcades. That could leave councils and the Treasury to determine how the new rules work at individual premises.
John Healey singled out adult gaming centres in the budget and said he was “raising taxes on gambling to support good growth on every high street”. The increase in machine duty also affects bookmakers and casinos, while adult gaming centres and vape shops in England lose eligibility for the specified business-rates discount.
The issue has a human cost as well as a business impact. The Merkur branch in Stockport is among the arcades licensed as a bingo venue. Wendy Hughes, who had terminal cancer, lost £2,000 there over two spells lasting 16 hours. Merkur was fined £100,000 after details of its treatment of Hughes were revealed. Hughes has since died.
Officials and industry call for tighter rules
Alex Ballinger, a Labour MP and co-chair of the gambling reform all-party parliamentary group, welcomed the higher duty but said the licensing route should not undermine the business-rates change. “We must ensure these licences cannot be used to sidestep the new business rates rules,” he said.
Ballinger urged the Department for Culture, Media and Sport to advance proposals to tighten licensing rules while a consultation is under way. He said he was confident ministers would work with the regulator on closing loopholes and enforcement.
Paul Turner-Mitchell, a business-rates expert at Altus Group, said the outcome would depend partly on how the Treasury defines an adult gaming centre and how local councils apply the rules. “A bingo licence alone does not settle its business rates treatment,” he said.
Operators may also convert their remaining adult gaming centre licences to bingo licences. That prospect puts further weight on the details of the rules and on council enforcement. Merkur and Admiral did not respond to a request for comment.
Joseph Cullis, president of arcade operators’ trade body Bacta, said the sector would be hit hard by the tax changes. “My great-grandfather started our family business back in 1962, and we’ve spent more than 60 years building it into what it is today,” he said.
