Slot operators use bingo licenses to dodge new budget taxes

Hundreds of high street venues classified as bingo halls may continue to receive business rate discounts despite operating primarily as slot machine farms. This regulatory gap allows major operators to retain a tax break that the government intended to remove from adult gaming centers in the latest budget.

Finance Secretary John Healey increased duty on slot machine takings from 20% to 25% in his first budget this week. He stated the move would support high street growth. He also declared that adult gaming centers and vape shops in England would lose eligibility for a business rate discount reserved for leisure and hospitality businesses. Prime Minister Andy Burnham supported the policy on social media, framing it as a key part of his plan to improve local retail districts.

Records from the Gambling Commission suggest that many venues owned by Merkur and Admiral, the UK's two largest slot operators, hold bingo licenses. These licenses allow the shops to qualify for the rate relief. The Guardian’s analysis indicates that hundreds of slot machine venues may have exploited this structure. Data duplication makes precise counting difficult, but more than 200 arcades are licensed as bingo venues while appearing geared toward slot play.

Inspections of four Merkur shops and one Admiral location found that bingo was advertised in shop windows. Inside, the majority of the floor space was dedicated to slot machines. Bingo tablets were stacked in a small corner. In one instance, covert filming captured a staff member saying no one used the bingo tablets and that they did not appear to be working. The slots offered a £2 spin every 2.5 seconds with a £500 jackpot. These category B3 machines are linked to higher levels of gambling-related harm in several studies.

The loophole has practical consequences for local budgets and consumers. In Stockport, Merkur Slots is one of the licensed bingo venues. Wendy Hughes, who had terminal cancer, lost £2,000 over two 16-hour visits to this specific branch. Merkur was later fined £100,000 after the details of Hughes’ losses became public. Hughes has since died. Operators with remaining adult gaming center licenses could also convert them to bingo status to maintain the discount.

Paul Turner-Mitchell of Altus Group, a real estate intelligence firm, said the outcome depends on how the Treasury defines an adult gaming center and how local councils enforce the rules. He noted that a bingo license alone does not settle the business rates treatment. The Department for Culture, Media and Sport is currently consulting on proposals to tighten licensing rules. Labour MP Alex Ballinger, co-chair of the gambling reform all-party parliamentary group, urged the government to be vigilant. He said, “We must ensure these licences cannot be used to sidestep the new business rates rules.”

Joseph Cullis, president of the arcade operators’ trade body Bacta, said the industry would face significant pressure. He described his family business as having been built over 60 years. He stated that the decision would force family-run businesses to reconsider investment and make difficult choices about their future. Larger operators would also need to scale back plans. Merkur and Admiral did not respond to requests for comment.