Bingo hall licensing loophole could undercut Treasury gambling tax rise

A licensing arrangement that lets hundreds of slot machine shops register as bingo halls may undermine the government’s attempt to tax high street gambling venues more heavily, raising questions about whether the Treasury’s budget measures can be enforced as intended.

In his first budget this week, John Healey singled out adult gaming centres, increasing duty on slot machine takings from 20% to 25%. He framed the move as “raising taxes on gambling to support good growth on every high street”. Alongside the duty rise, which will also affect bookmakers and casinos, he announced that adult gaming centres and vape shops in England would no longer qualify for a discount on business rates intended for leisure and hospitality businesses.

That policy, however, depends on how venues are classified. Guardian analysis suggests many shops owned by the UK’s two largest slot farm companies, Merkur and Admiral, could escape the tax change altogether. The reason is a loophole that allows operators to hold bingo licences for venues that appear to offer slot machines almost exclusively. Gambling Commission records indicate that hundreds of slot machine venues may have taken advantage of this arrangement.

The prime minister, Andy Burnham, has been a vocal critic of adult gaming centres and posted on Instagram after the budget to back the policy, a key plank of his pitch to improve British high streets.

The scale of the licensing pattern is documented in regulator records. More than 200 arcades are licensed as bingo venues despite appearing to be geared towards slot machine play, according to Gambling Commission data, though some duplication makes exact numbers difficult to measure. Operators could also now convert their remaining adult gaming centre licences to bingo.

When the Guardian visited four venues owned by Merkur and one owned by Admiral, all advertised bingo in their shop windows. Inside, the shops appeared to offer mainly slot machines, with bingo available only on tablets stacked in one small corner of the room, allowing the venues to operate under a bingo licence. In at least one case, captured in covert filming, a member of staff said nobody ever used the bingo tablets, and they appeared not to be in working order. The rest 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.

One venue licensed in this way is 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 the company’s exploitation of Hughes, who has since died.

The accountability question now sits with the Department for Culture, Media and Sport, which has a consultation under way on proposals to tighten licensing rules. 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. He urged the department to proceed with the proposals, adding: “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.”

Enforcement may also rest with local authorities. Paul Turner-Mitchell, a business rates expert at the real estate intelligence company Altus Group, said the outcome of the tax change could hinge on how the Treasury defined an adult gaming centre and how local councils chose to enforce the rules. “A bingo licence alone does not settle its business rates treatment,” he said.

The full analysis, including the licensing records and the budget measures, is set out in the Guardian’s reporting at https://www.theguardian.com/society/2026/nov/01/high-street-slot-farms-budget-tax-rise-business-rates-bingo-licence-loophole.

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 by the tax changes. “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,” he said. “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.”