Hundreds of high street “slot farms” could continue claiming a discount on their business rates, unless the government closes a loophole that allows them to pose as bingo halls. The loophole emerged after Chancellor John Healey increased duty on slot machine takings from 20% to 25% in his first budget.
High Street Operators Exploit Licensing Distinctions
The Guardian reported that Merkur and Admiral operate venues that appear to be geared towards slot machine play. Gambling Commission records indicate that over 200 arcades are licensed as bingo venues despite appearing to be geared towards slot machine play. Inside these establishments, bingo is frequently restricted to tablets stacked in a corner, with staff noting customers rarely use them. The remainder of the venue is dedicated to slot machines allowing a £2 spin every 2.5 seconds for a jackpot of £500.
The chancellor says he is ‘raising taxes on gambling to support good growth on every high street’. A bingo licence alone does not settle its business rates treatment.
Financial Pressure and Corporate Mitigation Strategies
The duty increase applies to machines with a maximum stake above £1 or maximum prize above £100. Analysts view the increase as a clearing event that large operators can absorb through shop closures and market share consolidation. Entain expects the rise to cost its UK and Ireland retail business about £25 million a year. Deutsche Bank saw scope to mitigate approximately 30% through retail closures and market share gains.
Trade association Bacta criticized the broader impact of the tax changes. Joseph Cullis, the president of Bacta, stated that the policy threatens family-run businesses and seaside attractions dependent on adult gaming centres. Merkur and Admiral did not respond to a request for comment.
| Operator / Entity | Impact Metric | Reported Consequence |
|---|---|---|
| Entain | £25 million annually | Expected pre-mitigation retail cost impact in UK and Ireland |
| Rank | 6% pre-mitigation EBITDA impact | Potential benefit from local competitor closures |
| HM Treasury | £135 million to £150 million | Projected additional revenue for 2027/28 and 2028/29 |
Regulatory Enforcement and Future Market Adjustments
Regulus Partners warned that the cash flow reduction will prove fatal to many marginal venues. Responsibility for accounting for and paying machine games duty will transfer from machine operators to machine suppliers from April 2028.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
