Hundreds of adult gaming centres in England could continue claiming discounted business rates by exploiting a bingo hall loophole, despite the chancellor's move to raise tax on the sector. John Healey increased duty on slot machine takings from 20% to 25% this week and said adult gaming centres (AGCs) and vape shops in England would no longer qualify for leisure and hospitality business rate discounts. However, The Guardian UK Business reported that many venues owned by the UK's two largest slot farm companies, Merkur and Admiral, have obtained bingo licences for locations that appear to offer slot machines almost exclusively, potentially allowing them to escape the new rules.
Gambling Commission records suggest that hundreds of slot machine venues may have exploited this loophole. According to The Guardian UK Business's analysis, more than 200 arcades are licensed as bingo venues despite appearing geared towards slot machine play, with some data duplicated making exact numbers hard to measure. In at least one case captured in covert filming, a member of staff said nobody ever used the bingo tablets and they appeared not to be in working order, with the remainder of the venue dedicated to slot machines offering a £2 spin every 2.5 seconds for a £500 jackpot. These category B3 machines are associated with higher levels of gambling-related harm than most other products according to several studies.
The Merkur Slots shop in Stockport exemplifies the issue. According to The Guardian UK Business, Wendy Hughes, who had terminal cancer, lost £2,000 there over two spells lasting 16 hours. Merkur was fined £100,000 after the outlet revealed details of the case; Hughes has since died. Operators could also convert their remaining AGC licences to bingo licences to continue avoiding the new business rates rules.
Labour MP Alex Ballinger, co-chair of the gambling reform all-party parliamentary group, welcomed the tax increase but urged the government to close the loophole. He said the Department for Culture, Media and Sport should proceed with proposals to tighten licensing rules amid a consultation. Paul Turner-Mitchell of real estate intelligence company Altus Group said the outcome could hinge on how the Treasury defined an AGC and how local councils enforced the rules, noting that a bingo licence alone does not settle business rates treatment.
Joseph Cullis, president of arcade operators' trade body Bacta, said the industry would be hit hard by the tax changes. He said the decision would force family-run businesses to reconsider investment and make difficult decisions about their future, with even larger operators forced to scale back their plans. For business owners in the gaming sector, the tax rise on slot machine takings creates immediate pressure on revenues, though those with bingo licences may face less impact if the loophole remains open.