John Healey increased duty on slot machine takings from 20% to 25% in his first budget and said adult gaming centres in England would lose a business rates discount, but Guardian analysis suggests many venues owned by the UK’s two largest slot farm companies, Merkur and Admiral, could escape the tax tweak because they hold bingo licences. The venues advertised bingo but appeared to offer mainly slot machines, with a staff member in at least one covertly filmed case saying nobody ever used the bingo tablets.
Chancellor John Healey singled out adult gaming centres (AGCs) in the budget, saying he was “raising taxes on gambling to support good growth on every high street”. The prime minister, Andy Burnham, has been a vocal critic of AGCs and backed the policy on Instagram after the budget. However, Gambling Commission records suggest that hundreds of slot machine venues may have exploited a loophole: they have obtained bingo licences while appearing to be geared towards slot machine play.
The Guardian visited four Merkur shops and one Admiral shop. Bingo was only available on tablets stacked in one small corner. In at least one case, the tablets appeared not to be in working order. The venues offered category B3 slot machines with a £2 spin every 2.5 seconds for a £500 jackpot, machines associated with higher levels of gambling-related harm according to studies. One such Merkur venue in Stockport was where a woman with terminal cancer lost £2,000; Merkur was fined £100,000 after the Guardian revealed the details.
Labour MP Alex Ballinger, co-chair of the gambling reform all-party parliamentary group, welcomed the tax increase but urged vigilance: “We must ensure these licences cannot be used to sidestep the new business rates rules.” He called on the Department for Culture, Media and Sport to proceed with proposals to tighten licensing rules amid a consultation. Paul Turner-Mitchell of Altus Group said the outcome could hing on how the Treasury defines an AGC and how local councils enforce rules: “A bingo licence alone does not settle its business rates treatment.” Merkur and Admiral did not respond to a request for comment.
Joseph Cullis, president of the arcade operators’ trade body Bacta, said the industry would be hit hard: “Like many of the family-run businesses I represent across the sector, this decision will force us to reconsider investment and make difficult decisions about our future. Even larger operators will now be forced to scale back their plans.”
Analysis
Why This Matters
- The loophole could undermine the goverment's effort to raise tax revenue from gambling and revitalise high streets.
- If unclosed, the policy may not affect the largest slot farm operators, while smaller family-run businesses bear the tax increase.
- The issue highlights the risk of regulatory gaming, where businesses adopt licences to avoid intended tax and rates treatment.
Background
Adult gaming centres, often called slot farms, have been criticised for concentrating high-stakes slot machines on high streets. Prime Minister Andy Burnham has been a vocal critic. In his first budget, Chalnor John Healey announced a rise in duty on slot machine takings from 20% to 25% and removal of business rates relief for AGCs, framing it as supporting good growth on every high street. The Guardian’s investigation now suggests a potential loophole through bingo licences.
Key Perspectives
John Healey (Chalnor): said he is “raising taxes on gambling to support good growth on every high street”.
Andy Burnham (prime minister): backed the policy after the budget.
Alex Ballinger (Labour MP): welcomed the tax increase but urged the government to close the loophole and tighten licensing rules.
Paul Turner-Mitchell (Altus Group): said the outcome hinges on Treasury definitions and council enforement; a bingo licence alone does not settle business rates treatent.
Joseph Cullis (Bacta, arcade operators' trade body): said the tax changes will force family-run businesses to reconsider investment and make difficult decisions, and larger operators will scale back plans.
What to Watch
- The goverment's consultation on tighter licensing rules for gambling venues.
- How local councils define and enfore business rates relief on venues with bingo licences.
- Whether Merkur and Admiral convert remaining AGC licences to bingo to maintain the discount.
Checked
11 claims in this story checked against 1 source: 11 supported.
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- SupportedHigh-street slot farms could evade the budget tax change through a bingo-licence loophole, according to Guardian analysis.UK news | The Guardian: “many shops owned by the UK’s two largest slot farm companies, Merkur and Admiral, could escape the tax tweak, Guardian analysis suggests. This is because they have obtained bingo licences for venues that appear to offer slot machines almost exclusively.”
- SupportedGambling Commission records suggest hundreds of slot-machine venues may have used the loophole by holding bingo licences while appearing geared towards slot-machine play.UK news | The Guardian: “Gambling Commission records suggest that hundreds of slot machine venues may have exploited this loophole.”
- SupportedHealey increased duty on slot-machine takings from 20% to 25% and said AGCs in England would lose a business-rates discount.UK news | The Guardian: “he increased duty on slot machine takings from 20% to 25%”
- SupportedHealey said he was “raising taxes on gambling to support good growth on every high street”.UK news | The Guardian: “claiming he was “raising taxes on gambling to support good growth on every high street”.”
- SupportedAndy Burnham was a vocal critic of AGCs and posted on Instagram after the budget to back the policy.UK news | The Guardian: “The prime minister, Andy Burnham, has been a vocal critic of AGCs and posted on Instagram after the budget to back the policy”
- SupportedThe Guardian visited four Merkur shops and one Admiral shop; bingo was available only on tablets in one small corner, and in at least one case a staff member said nobody ever used them.UK news | The Guardian: “When the Guardian visited four owned by Merkur and one owned by Admiral, all advertised bingo in their shop windows. However, the shops appeared to offer mainly slot machines inside. Bingo was available only on tablets stacked in one small corner”
- SupportedThe venues offered category B3 machines with a £2 spin every 2.5 seconds and a £500 jackpot; studies associate these machines with higher levels of gambling-related harm.UK news | The Guardian: “The remainder of the venue was dedicated to slot machines offering a £2 spin every 2.5 seconds for a jackpot of £500. These category B3 machines are associated with higher levels of gambling-related harm than most other products, according to several studies.”
- SupportedA Merkur venue in Stockport was where a woman with terminal cancer lost £2,000, and Merkur was fined £100,000 after the Guardian revealed the details.UK news | The Guardian: “The Merkur Slots shop in Stockport, where Wendy Hughes, who had terminal cancer, lost £2,000 over two spells lasting 16 hours. Merkur was fined £100,000 after the Guardian revealed the details of Merkur’s exploitation of Hughes”
- SupportedAlex Ballinger, a Labour MP and co-chair of the gambling reform all-party parliamentary group, said: “We must ensure these licences cannot be used to sidestep the new business rates rules.”UK news | The Guardian: “The Labour MP Alex Ballinger, a co-chair of the gambling reform all-party parliamentary group, welcomed the tax increase on slot machines but urged the government to be vigilant about the loophole. “We must ensure these licences cannot be used to sidestep the new business rates rules,” he said.”
- SupportedPaul Turner-Mitchell said: “A bingo licence alone does not settle its business rates treatment.”UK news | The Guardian: ““A bingo licence alone does not settle its business rates treatment,” he said.”
- SupportedJoseph Cullis, president of Bacta, said the industry would be hit hard and said the decision would force businesses to reconsider investment and make difficult decisions about their future.UK news | The Guardian: “Joseph Cullis, the president of the arcade operators’ trade body Bacta, said the industry would be hit hard by the tax changes. “Like many of the family-run businesses I represent across the sector, this decision will force us to reconsider investment and make difficult decisions about our future. Even larger operators will now be forced to scale back their plans.””