High street ‘slot farms’ could evade budget tax rise through bingo hall loophole

An adult gaming centre, or AGC, is a high-street gambling venue focused on gaming machines. The article calls some of these businesses “slot farms” because they appear designed mainly for slot-machine play. Their machines can offer rapid spins and substantial jackpots, creating a concentrated gambling environment.

A bingo venue is supposed to provide bingo, but the shops visited by the Guardian presented a different picture. Four Merkur venues and one Admiral venue advertised bingo, yet bingo tablets occupied only one small corner. Most of the available space held slot machines charging £2 per spin every 2.5 seconds, with a £500 jackpot.

The distinction matters because licensing can affect tax treatment. The venues could operate under bingo licences even when bingo appeared unused. That may let them argue for a business-rates discount intended for leisure and hospitality businesses, although a bingo licence alone does not settle the rates question.

The budget increased duty on slot-machine takings from 20% to 25%. The change affects adult gaming centres, bookmakers and casinos. John Healey said the measure would raise gambling taxes to support good growth on every high street.

It also changed business-rates eligibility in England. AGCs and vape shops would no longer qualify for a discount aimed at leisure and hospitality businesses. The policy therefore combines a direct tax increase with a property-cost change for certain high-street businesses.

The complication is licensing. Many apparently slot-focused venues have obtained bingo licences, and bingo venues may not be covered in the same way as AGCs. Operators could also convert remaining AGC licences to bingo. The final effect may depend on how the Treasury defines an AGC and how councils enforce the rules.

Gambling Commission records list more than 200 arcades licensed as bingo venues even though they appear geared towards slot-machine play. That is the clearest figure in the article, but it is not necessarily the full scale of the practice.

The Guardian visited four Merkur-owned venues and one owned by Admiral. Each advertised bingo, yet the shops appeared to offer mainly slots. Bingo tablets were placed in a small corner, and in one covertly filmed venue, a staff member said nobody used them. The tablets also appeared not to work.

The records suggest hundreds of venues may have exploited the loophole. However, some data is duplicated, so the exact number cannot be measured. The two largest slot-farm companies, Merkur and Admiral, may therefore have many shops able to avoid or challenge the new AGC business-rates treatment.

The loophole works through the gap between a venue’s licence and its apparent day-to-day business. A shop can advertise bingo, secure a bingo licence, and present itself as a bingo venue while earning most of its activity from slot machines.

The Guardian found bingo tablets stacked in one small corner of several shops. The rest of each venue was devoted to slot machines. In one case, a staff member said nobody used the tablets, and they appeared not to be working. Yet the venue could operate under its bingo licence.

That status may help the operator argue for the leisure-and-hospitality business-rates discount that the budget removed from AGCs. The business-rates expert Paul Turner-Mitchell warned that a bingo licence alone does not settle treatment. The Treasury’s definition and councils’ enforcement decisions will be important.

Keeping the loophole open could allow slot-focused venues to present themselves as bingo businesses. They might retain a business-rates discount that the budget intended to remove from AGCs. That would weaken the policy’s effect and could reduce the extra revenue or high-street change the government expects.

Closing it would likely make operators pay the higher rates intended for AGCs, alongside the increased slot-machine duty. The industry says the changes will hit hard. Joseph Cullis said family businesses may reconsider investment, while larger operators may scale back plans. Local councils would need to apply the rules consistently.

Government revenue would depend on classification and enforcement. A clear rule could make the new tax and rates treatment more reliable. The Department for Culture, Media and Sport is consulting on tighter licensing rules, while Alex Ballinger urged ministers and the regulator to close loopholes and enforce them.

The Gambling Commission is central to the licensing picture. Its records show more than 200 apparently slot-focused arcades licensed as bingo venues. The article also refers to the regulator in connection with future enforcement and licensing loopholes.

Local councils decide how business-rates rules are applied in practice. Paul Turner-Mitchell said the outcome could depend on councils’ enforcement choices. The Treasury also matters because its definition of an adult gaming centre could determine which venues lose the discount.

The Department for Culture, Media and Sport is consulting on proposals to tighten licensing rules. Alex Ballinger urged it to proceed and work with the regulator. Together, these bodies shape whether a venue’s licence matches its actual operation and whether it receives the correct rates treatment. The article does not identify every authority involved in issuing each licence.

Business rates are charges linked to occupied business property, while gambling duty is a tax on gambling activity or takings. In this case, the budget changed both pressures: it raised slot-machine duty and removed AGCs’ access to a business-rates discount in England.

The gambling duty targets money made from machines. The rates change targets the cost of operating premises. Together, they affect both how profitable a venue is and how much it costs to maintain a high-street location. The article says the duty also affects bookmakers and casinos.

Governments may use these tools to raise revenue and shape business behaviour. John Healey presented the gambling increase as support for good growth on high streets. The rates policy was aimed at excluding AGCs and vape shops from a leisure-and-hospitality discount. The article’s loophole shows why definitions and enforcement matter.