Slot farms exploit bingo hall loophole to avoid business rate hikes

The UK government’s recent efforts to reform gambling taxation face a significant hurdle as hundreds of venues known as high street slot farms appear to be exploiting a licensing loophole. While the government aims to increase revenue and support high street growth, these businesses may avoid the intended tax burden by masquerading as bingo halls.

In his latest budget, John Healey increased the duty on slot machine takings from 20% to 25%. The policy, which also impacts bookmakers and casinos, specifically removes the eligibility of adult gaming centres (AGCs) and vape shops for business rate discounts previously reserved for leisure and hospitality firms. Prime Minister Andy Burnham has publicly supported these measures, viewing them as a vital step in improving the quality of British high streets.

However, analysis suggests that major operators like Merkur and Admiral may circumvent these changes. Gambling Commission records indicate that hundreds of venues have secured bingo licences despite primarily operating slot machines. Investigations at several sites revealed that bingo offerings were often limited to non-functional tablets in a corner, while the main floor space was dedicated to high-stakes slot machines. These machines, which allow for a £2 spin every 2.5 seconds, are linked to significant gambling-related harm.

Hundreds of slot machine venues may evade new business rate taxes by using bingo licences to qualify.

Licensing concerns and industry impact

Concerns have been raised by members of parliament regarding the potential for operators to convert existing AGC licences into bingo licences to maintain tax advantages. Alex Ballinger, co-chair of the gambling reform all-party parliamentary group, has urged the government to remain vigilant and ensure that current licensing rules are tightened to prevent such avoidance. While experts note that a bingo licence does not automatically guarantee a business rate reduction, the final outcome remains dependent on how the Treasury defines an AGC and the enforcement actions taken by local councils.

Industry representatives, including Joseph Cullis of the trade body Bacta, have warned that the tax increases will place severe pressure on family-run businesses and force larger operators to reduce future investments. The debate continues as the Department for Culture, Media and Sport reviews proposals to address these regulatory gaps.

Why it matters

The government's attempt to regulate the gambling sector highlights a tension between tax policy and business classification. If the loophole remains open, it undermines the goal of ensuring that gambling venues contribute fairly to the economy while potentially failing to curb the proliferation of high-stakes machines in local communities.