Hundreds of high street slot-machine venues in England could avoid part of the government’s new gambling tax measures through a loophole involving bingo licences, according to an analysis of Gambling Commission records.
Chancellor John Healey increased the duty on slot-machine takings from 20% to 25% in his first budget. He also said adult gaming centres (AGCs) and vape shops would no longer qualify for a business-rates discount intended for leisure and hospitality businesses.
However, many venues operated by Merkur and Admiral, the UK’s two largest slot-farm companies, may remain eligible for the discount because they are licensed as bingo halls. More than 200 arcades appear in Gambling Commission records as bingo venues, although duplicated data makes the exact number difficult to establish.
Visits to four Merkur sites and one Admiral venue found bingo advertised outside, while the interiors appeared to be dominated by slot machines. Bingo was offered on tablets placed in a small section of each venue. In one case, a staff member said the tablets were not used and appeared not to work.
The remaining space was occupied by category B3 slot machines offering £2 spins every 2.5 seconds and jackpots of up to £500. Several studies associate these machines with higher levels of gambling-related harm than most other gambling products.
One venue operating under a bingo licence is Merkur Slots in Stockport. Wendy Hughes, who had terminal cancer, lost £2,000 during two 16-hour visits. Merkur was fined £100,000 after the case was reported; Hughes has since died.
Operators could also convert their remaining AGC licences to bingo licences. Labour MP Alex Ballinger, co-chair of the all-party parliamentary group on gambling reform, welcomed the higher duty but called for action to prevent licences being used to bypass the new business-rates rules.
Ballinger urged the Department for Culture, Media and Sport to advance proposals to tighten licensing requirements while a consultation is under way. He said the government had recognised the issue and should work with regulators to close the loophole and strengthen enforcement.
Paul Turner-Mitchell, a business-rates expert at Altus Group, said the impact of the changes could depend on how the Treasury defined an AGC and how local councils enforced the rules. He noted that holding a bingo licence alone would not determine a venue’s business-rates treatment.
Merkur and Admiral did not respond to requests for comment. Joseph Cullis, president of arcade operators’ trade body Bacta, said the tax changes would put significant pressure on the sector, forcing family-run and larger businesses to reconsider investment and reduce their plans.
Sources: The Guardian Business.