Hundreds of high street "slot farms" could sidestep a major Budget tax raid by exploiting a bingo licence loophole, analysis has revealed.
Adult gaming centres (AGCs) were targeted last week as Chancellor John Healey increased duty on slot machine takings from 20% to 25%. The Chancellor also said AGCs and vape shops would lose business rates discounts reserved for genuine leisure and hospitality venues.
Prime Minister Andy Burnham welcomed the crackdown on social media, calling it a vital step in his mission to clean up Britain's struggling town centres.
Bingo licences mask slot machine operations
However, the clampdown is already facing disruption as major operators exploit a regulatory loophole. Gambling Commission records suggest more than 200 arcades across the country are registered as bingo halls.
Visits to multiple branches in England by The Guardian found window displays advertising bingo, yet the premises were filled with high-stakes Category B3 fixed-odds machines offering £500 jackpots every 2.5 seconds. In some branches, the "bingo" element was limited to a small stack of dusty electronic tablets tucked away in a corner. Undercover footage captured staff admitting nobody ever touched them, with some devices not even in working order.
Among the sites is a Merkur Slots venue in Stockport, previously fined £100,000 after a terminally ill woman lost £2,000 during a 16-hour binge. Despite functioning as an arcade, it remains registered under a bingo licence.
Campaigners demand loophole closure
Campaigners fear other operators will rapidly convert their standard arcade licences into bingo permits to bypass the rates hike entirely.
Labour MP Alex Ballinger, co-chair of the gambling reform all-party parliamentary group, backed the tax rise but demanded ministers plug the gap immediately. "We must ensure these licences cannot be used to sidestep the new business rates rules," he said. "The Government has already recognised this problem, and I am confident ministers will work with the regulator to close loopholes and ensure enforcement going forward."
Paul Turner-Mitchell, a business rates expert at Altus Group, warned the crackdown risks falling flat depending on the Treasury's wording: "A bingo licence alone does not settle its business rates treatment."
Industry anger over Budget measures
Arcade chiefs have reacted with anger to the broader Budget measures. Joseph Cullis, president of trade body Bacta, warned family-run businesses are on the brink of collapse: "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. 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."
The Express has contacted Merkur and Admiral for comment.
